New characteristics and hedonic price index numbers
Changes in product characteristics on the extensive margin (the addition of new features and the removal of old ones) are an important and hitherto neglected dimension of quality change. Standard techniques for adjusting price indices for new goods cannot handle such changes satisfactorily, and this...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
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MIT Press
2023
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| _version_ | 1826312945421778944 |
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| author | Crawford, IAN Neary, P |
| author_facet | Crawford, IAN Neary, P |
| author_sort | Crawford, IAN |
| collection | OXFORD |
| description | Changes in product characteristics on the extensive margin (the addition of new features and the removal of old ones) are an important and hitherto neglected dimension of quality change. Standard techniques for adjusting price indices for new goods cannot handle such changes satisfactorily, and this leads to an economically and statistically significant bias in the measurement of prices and real output. We combine insights from the theories of exact index numbers and demand for characteristics to develop a new method for incorporating changes on the extensive characteristic margin. Applied to U.K. data on new car sales, our method leads to revisions in estimated inflation rates for this commodity group that are both plausible and quantitatively important. |
| first_indexed | 2024-03-07T08:13:50Z |
| format | Journal article |
| id | oxford-uuid:3b001ee1-5d9d-42ea-b96c-54c661b9b8e2 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-09-25T04:03:15Z |
| publishDate | 2023 |
| publisher | MIT Press |
| record_format | dspace |
| spelling | oxford-uuid:3b001ee1-5d9d-42ea-b96c-54c661b9b8e22024-05-09T15:03:14ZNew characteristics and hedonic price index numbersJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:3b001ee1-5d9d-42ea-b96c-54c661b9b8e2EnglishSymplectic ElementsMIT Press2023Crawford, IANNeary, PChanges in product characteristics on the extensive margin (the addition of new features and the removal of old ones) are an important and hitherto neglected dimension of quality change. Standard techniques for adjusting price indices for new goods cannot handle such changes satisfactorily, and this leads to an economically and statistically significant bias in the measurement of prices and real output. We combine insights from the theories of exact index numbers and demand for characteristics to develop a new method for incorporating changes on the extensive characteristic margin. Applied to U.K. data on new car sales, our method leads to revisions in estimated inflation rates for this commodity group that are both plausible and quantitatively important. |
| spellingShingle | Crawford, IAN Neary, P New characteristics and hedonic price index numbers |
| title | New characteristics and hedonic price index numbers |
| title_full | New characteristics and hedonic price index numbers |
| title_fullStr | New characteristics and hedonic price index numbers |
| title_full_unstemmed | New characteristics and hedonic price index numbers |
| title_short | New characteristics and hedonic price index numbers |
| title_sort | new characteristics and hedonic price index numbers |
| work_keys_str_mv | AT crawfordian newcharacteristicsandhedonicpriceindexnumbers AT nearyp newcharacteristicsandhedonicpriceindexnumbers |