Hedonic Imputation versus Time Dummy Hedonic Indexes

Walter Diewert, Saeed Heravi and Mick Silver

No 14018, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Statistical offices try to match item models when measuring inflation between two periods. However, for product areas with a high turnover of differentiated models, the use of hedonic indexes is more appropriate since they include the prices and quantities of unmatched new and old models. The two main approaches to hedonic indexes are hedonic imputation (HI) indexes and dummy time hedonic (HD) indexes. This study provides a formal analysis of the difference between the two approaches for alternative implementations of an index that uses weighting that is comparable to the weighting used by the Törnqvist superlative index in standard index number theory. This study shows exactly why the results may differ and discusses the issue of choice between these approaches. An illustrative study for desktop PCs is provided.

JEL-codes: C43 C82 E31 O47 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-mac
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Published as Hedonic Imputation versus Time Dummy Hedonic Indexes , W. Erwin Diewert, Saeed Heravi, Mick Silver. in Price Index Concepts and Measurement , Diewert, Greenlees, and Hulten. 2009
Published as W. E. Diewert & Mick Silver & Saeed Heravi, 2007. "Hedonic Imputation Versus Time Dummy Hedonic Indexes," IMF Working Papers, vol 07(234).

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Chapter: Hedonic Imputation versus Time Dummy Hedonic Indexes (2009)
Working Paper: Hedonic Imputation versus Time Dummy Hedonic Indexes (2007)
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