Convenient links for the estimation of hedonic price indexes: the case of unique, infrequently traded assets
Esmeralda Ramalho (eramalho@iseg.ulisboa.pt) and
Joaquim Ramalho (jjsro@iscte-iul.pt)
CEFAGE-UE Working Papers from University of Evora, CEFAGE-UE (Portugal)
Abstract:
Hedonic methods are a prominent approach in the construction of quality-adjusted price indexes. This paper shows that the process of computing such indexes is substantially simplified if arithmetic (geometric) price indexes are computed based on exponential (log-linear) hedonic functions estimated by the Poisson pseudo maximum likelihood (ordinary least squares) method. A Monte Carlo simulation study based on housing data illustrates the convenience of the links identified and the very attractive properties of the Poisson estimator in the hedonic framework.
Keywords: Hedonic price indexes; Quality adjustment; Retransformation; House prices; Exponential regression; Poisson pseudo maximum likelihood. (search for similar items in EconPapers)
JEL-codes: C43 C51 E31 R31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2014
New Economics Papers: this item is included in nep-cul, nep-ecm, nep-mac and nep-ure
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Journal Article: Convenient links for the estimation of hedonic price indexes: the case of unique, infrequently traded assets (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cfe:wpcefa:2014_01
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