New Characteristics and Hedonic Price Index Numbers

• 成果类型: Article
• 署名作者: Crawford, Ian; Neary, J. Peter
• 署名单位: University of Oxford; University of Oxford; Centre for Economic Policy Research - UK; Leibniz Association; Ifo Institut
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01079
• 发表日期: 2023-05
• 页码: 665-682
• 关键词: globalization; QUALITY

摘要

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.