The Difference Between Hedonic Imputation Indexes and Time Dummy Hedonic Indexes

Author/Editor:

Saeed Heravi ; Mick Silver

Publication Date:

July 1, 2006

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Statistical offices try to match item models when measuring inflation between two periods. For product areas with a high turnover of differentiated models, however, the use of hedonic indexes is more appropriate since they 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 may differ and discusses the issue of choice between these approaches.

Series:

Working Paper No. 06/181

Subject:

English

Publication Date:

July 1, 2006

ISBN/ISSN:

9781451864410/1018-5941

Stock No:

WPIEA2006181

Format:

Paper

Pages:

20

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