Chapter

Different Approaches to Estimating Hedonic Indexes

Saeed Heravi and Mick Silver

in Hard-to-Measure Goods and Services

Published by University of Chicago Press

Published in print November 2007 | ISBN: 9780226044491
Published online February 2013 | e-ISBN: 9780226044507 | DOI: http://dx.doi.org/10.7208/chicago/9780226044507.003.0009
Different Approaches to Estimating Hedonic Indexes

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This chapter examines alternative approaches to the use of hedonic indexes for Consumer Price Index measurement in dynamic markets to explicitly adjust for in-sample and out-of-sample bias when both matched and unmatched data are used. The chapter is organized as follows. Section 8.2 describes the broad nature of hedonic indexes. Section 8.3 outlines thirty-six alternative methods and discusses their relative merits. Section 8.4 summarizes research issues and formulas. Section 8.5 outlines the data for the study: monthly scanner data for three electrical consumer durables: washing machines, vacuum cleaners, and dishwashers. Section 8.6 discusses the results from the thirty-six measures for three products over two years, that is, 216 resulting index numbers. It employs a meta-analysis of this data to better establish the patterns from employing different index number formulations.

Keywords: hedonic indexes; consumer price index; economic measurement; sample bias; washing machines; vacuum cleaners; dishwashers

Chapter.  14228 words. 

Subjects: Microeconomics

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