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Different Approaches to Estimating Hedonic Indexes

Different Approaches to Estimating Hedonic Indexes

Chapter:
(p.235) 8 Different Approaches to Estimating Hedonic Indexes
Source:
Hard-to-Measure Goods and Services
Author(s):
Saeed HeraviMick Silver
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226044507.003.0009

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

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