Rent indices for housing in West Germany 1985 to 1998

Johannes Hoffmann and Claudia Kurz

No 2002,01, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: In several studies, hedonic methods have been used successfully for the ex post assessment of the accuracy of inflation measurement. Most of those studies relate to high-tech products, with respect to which traditional methods of compiling price indices often fail. We apply hedonic methods to rental housing services, which display less quality progress. However, as German households devote about 10 % of their total expenditure to rented housing services, even a small bias in this field might induce a substantial distortion in overall inflation measurement. On the basis of data from the German Socio-Economic Panel, we perform a hedonic analysis of housing rents and compile different price indices. Overall, we conclude that there is some evidence of an understatement of rent inflation in the official rent index for West Germany at the beginning of the 1990s.

Keywords: Consumer Price Index; hedonics; housing; matched models (search for similar items in EconPapers)
JEL-codes: C21 D12 D43 E31 (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (17)

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Working Paper: Rent indices for housing in West Germany 1985 to 1998 (2002)
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