 Measuring American rents: a revisionist historyTheodore M. Crone, Leonard Nakamura and Richard Voith No 01-8, Working Papers from Federal Reserve Bank of Philadelphia Abstract: Until the end of 1977, the method used to measure changes in rent of primary residence in the U.S. consumer price index (CPI) tended to omit price changes when units changed tenants or were temporarily vacant. Since such units typically had more rapid increases in rents than average units, omitting them biased inflation estimates downward. Beginning in 1978, the Bureau of Labor Statistics (BLS) implemented a series of methodological changes that reduced this bias. The authors use data from the American Housing Survey to check the success of the corrections. They compare estimates of the historical series adjusted for the BLS changes in methodology with a new hedonic estimate of changes in rental rates. The authors conclude that from 1940 to 1977 the CPI for rent would have been about 60 percent higher if current BLS practices had been used ? between 1.3 and 3.5 percentage points. Even after the corrections have been made, the authors' hedonic estimates suggest that the current CPI methodology may still understate the rental inflation rate by one-half to 1 percentage point. Keywords: Rent (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:01-8 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Working Papers from Federal Reserve Bank of Philadelphia Contact information at EDIRC. |
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