Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990's

Xose-Luis Varela-Irimia

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: This paper computes and compares alternative quality-adjusted price indexes for new cars in Spain in the period 1990-2000. The proposed hedonic approach simultaneously controls for time-invariant unobserved product effects and time-variant unobserved quality changes, that are assumed to be captured by model age effects. The results show that the non-adjusted price index largely overstates the increase in the cost of living induced by changes in car prices and that previous evidence for this market have not measured the real extent of that bias, probably due to the omission of controls for unobservables. It is also shown that omitting age effects can also lead to misleading conclusions. The estimated price indexes give also some insights on what could have been the determinants of price evolution in the Spanish car market. JEL classi…fication numbers: C43, E31, L11, L13, Keywords: Hedonic price indexes, Spanish car market, car prices, CPI, Cost of living

Keywords: Automòbils -- Indústria i comerç -- Espanya; Índex de preus al consum; Cost de la vida; Preus -- Política governamental; 338 - Situació econòmica. Política econòmica. Gestió; control i planificació de l'economia. Producció. Serveis. Turisme. Preus (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://hdl.handle.net/2072/169683

Related works:
Journal Article: Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990s (2014)
Working Paper: Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990?s (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/169683

Access Statistics for this paper

More papers in Working Papers from Universitat Rovira i Virgili, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Ariadna Casals ().