Abstract
Alan Dorfman and Mary Kokoski (2006)
"Estimating Dynamic Price Indexes"
Standard price indexes fix on a set of goods, each very precisely specified
as to what it is and where sold. Measurements of the change in
price of each good are made, and these combined by formula to get an
overall measure of change. In a "dynamic universe", goods disappear
and new ones appear, making a fixed product index difficult to construct.
In cross area indexes, in which we compare the overall prices of
goods in one area to those in another, there may be no common specific
goods available. In both cases, indexes are constructed using hedonic
regression. In hedonic regression, prices are modeled on the properties
of the goods, and the properties serve as the basis of comparison from
one time period to the next or one area to another. We here investigate
the behavior of dynamic price indexes compared to standard indexes,
and of estimators of dynamic indexes based on samples.
Last Modified Date: January 9, 2007
|