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A Hedonic price index for the Dutch car market

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Summary

A hedonic, or constant-quality, price index is constructed for the Dutch car market over the period 1950–72. Quality changes are evaluated by relating car prices to various characteristics in two cross-section analyses, and both the choice of variables - horsepower and weight - and the form of the relation confirm Griliches' analysis of American data. A price index is then constructed by linking a series of year-to-year indices, and it is found that relative car prices have been reduced by about half over the twenty-two year period. Both in the cross-section study and in the price index the analysis is confined to a limited number of car models with major shares of the market.

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References

  1. [1]

    Cramer, J. S., ‘Een prijsindex voor nieuwe personenauto's, 1950–1965,’Statistica Neerlandica, XX (1966), pp. 215–224.

  2. [2]

    Cramer, J. S., ‘Autoverkopen en autopark in Nederland,’Statistica Neerlandica, XXII (1968), pp. 119–132.

  3. [3]

    Griliches, Z., (ed.),Price Indexes and Quality Change, Cambridge, 1971.

  4. [4]

    Griliches, Z., ‘Hedonic Price Indexes for Automobiles,’Price Statistics of the Federal Government, new series, no. 73, New York, N.B.E.R., (1961); also in [3], pp. 55–87.

  5. [5]

    Dhrymes, Ph. J., ‘Price and Quality Changes in Consumer Capital Goods,’ [3], pp. 88–149.

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Additional information

We gratefully acknowledge the help ofR.A.I. andMinisterie van Financieën in providing the data, and ofF. den Butter, J. Broekhuis andMiss J. Meijering in the preparation of this report.

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Kroonenberg, N., Cramer, J.S. A Hedonic price index for the Dutch car market. De Economist 122, 357–366 (1974). https://doi.org/10.1007/BF01680115

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Keywords

  • International Economic
  • Public Finance
  • Price Index
  • Quality Change
  • Hedonic Price