We've
estimated
Hedonic indices for PC that allows to get
better estimates of price change for PC: a 11%
fall for personal computers in 2005 was
estimated and found a 11-23% bias in price index
for PC in Russia
Abstract
Economist
have noted for decades that Consumer Price Index
(CPI) in the developed countries is overstating
inflation by 0,5-2,0% per year. A significant
part of such a bias is found to be caused by the
presence of technology products and
differentiated products in CPI. An increasing
weight of these products in the Russian CPI may
also lead to a substantial upward bias. Nowadays
hedonic indices are believed to be the most
efficient way to reduce the bias. Following
Triplett we have developed the taxonomy of
hedonic price indices within the “direct
approach”. This first step is essential in
constructing a detailed set of hedonic price
indices. They can be used in two ways: to
estimate the bias in CPI and to elaborate
alternative official price indices for
IT-products. We've estimated
11% fall of price for personal computers in 2005
with the usage of hedonic price indices, a
11-23% positive bias in price index for PC in
Russia was also calculated. We also have found
that Russian CPI could be upward biased
by 0,12-0,23% per year due to new goods and
quality change effects for PC.
B.A. Thesis
(119 pages, 856 kb)
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Short Article
(20 pages, 335 kb)
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(Presentation in English)
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(Presentation)
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Prices and characteristics
Data for
2004
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(they were not used in the
original paper)
Prices and characteristics
Data for
2005
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Hedonic Regression Estimates.
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