The Difference Between Hedonic Imputation Indexes and Time Dummy Hedonic Indexes

By Mick Silver, Saeed Heravi. Social Science Research Network, 2006

61 citations recorded by the source corpus.

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, because these 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 (DTH) indexes. This study provides a formal analysis of the difference between the two approaches for alternative implementations of the Törnqvist “superlative” index. It shows why the results of the HI and DTH indexes may differ and discusses the issue of choice between these two approaches.

Subfields: Economics and Econometrics, Marketing

View Paper: https://www.semanticscholar.org/paper/ef6f6ce3c3126955c6b4c4016a1e7beb35ff3af1