United Arab Emirates: Technical Assistance Report-Hedonic Methods for Price Indices Mission
IMF Staff Country Reports, September 16, 2022
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Bibliographic details
- Published: September 16, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400221736.002
Mission overview
- A technical assistance (TA) mission was conducted remotely during January 16-20, 2022 to assist the Dubai Statistics Center (DSC) in introducing hedonic methods for quality adjustments in the consumer price index (CPI) and the real estate price index (REPI).
- The TA mission provided extensive training on using the recommended method accompanied by R codes adapted to the Dubai sample data.
Key findings and analysis
- Currently the REPI is compiled by DSC using stratification with simple averages.
- Moving from simple averages to hedonic regressions will improve the accuracy of the indicator since it will take into account the quality mix of properties within each stratum.
- The hedonics time dummy method with a rolling window of 12 months:
- provides more stable results, i.e., less volatile indices, since it pools one year of data instead of one quarter,
- is particularly recommended when few observations are available,
- is widely used for Residential Property Price Index compilation and for CPI compilation with web scraped data.
Methodological recommendation
- Recommended method: hedonics time dummy method with a rolling window of 12 months for compiling the REPI.
- Rationale:
- Pools one year of data rather than one quarter to reduce volatility.
- Adjusts for quality mix within strata via hedonic regressions rather than simple averaging.
Implementation and capacity building
- The TA mission included:
- extensive training on the hedonics time dummy method,
- provision of R codes adapted to the Dubai sample data to support implementation.
Subjects and keywords
- Subjects: Consumer price indexes, Data collection, Economic and financial statistics, International organization, Monetary policy, National accounts, Price indexes, Prices
- Keywords: Consumer price indexes, Data collection, DSC Management evaluation, Dubai land department, Price indexes, real estate price index, REPI CPI, Ta recipient, transaction data
Source: International Monetary Fund — United Arab Emirates: Technical Assistance Report-Hedonic Methods for Price Indices Mission (September 16, 2022).
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