Bootstrapping a hedonic price index: experience from used cars data
- 170 Downloads
Every hedonic price index is an estimate of an unknown economic parameter. It depends, in practice, on one or more random samples of prices and characteristics of a certain good. Bootstrap resampling methods provide a tool for quantifying sampling errors. Following some general reflections on hedonic elementary price indices, this paper proposes a case-based, a model-based, and a wild bootstrap approach for estimating confidence intervals for hedonic price indices. Empirical results are obtained for a data set on used cars in Switzerland. A simple and an enhanced adaptive semi-logarithmic model are fit to monthly samples, and bootstrap confidence intervals are estimated for Jevons-type hedonic elementary price indices.
KeywordsHedonic regression Hedonic price indices Bootstrap methods Wild bootstrap Confidence intervals Used cars
Unable to display preview. Download preview PDF.
- 1.Brachinger, H.W. (2002) Statistical Theory of Hedonic Price Indices. Working paper 1, Department of Quantitative Economics, University of Fribourg, SwitzerlandGoogle Scholar
- 2.Court, A.T. (1939) Hedonic price indexes with automotive examples. In: The Dynamics of Automobile Demand, pp. 99–117. General Motors Corporation, New YorkGoogle Scholar
- 4.Davidson, R., Flachaire, E. (2001) The Wild Bootstrap, Tamed at Last. IER Working paper 1000, Queen’s Institute for Economic Research, OntarioGoogle Scholar
- 6.Hulten, C.R. (2003) Price hedonics: a critical review. Economic Policy Review 9, 5–15Google Scholar
- 7.ILO, IMF, OECD, UNECE, Eurostat, The World Bank (eds.) (2004) Consumer Price Index Manual: Theory and Practice. International Labour Office, GenevaGoogle Scholar
- 13.R Development Core Team (2005) R: A language and environment for statistical computing. R Foundation for Statistical Computing, ViennaGoogle Scholar
- 14.Reis, H.J., Santos Silva, J.M.C. (2002) Hedonic Price Indexes for New Passenger Cars in Portugal (1997–2001). Working paper 10-02, Banco de Portugal Economic Research Department, LisboaGoogle Scholar
- 15.Triplett, J. (2004) Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes: Special Application to Information Technology Products. OECD Science, Technology and Industry Working Paper 2004/9, OECD Publishing, ParisGoogle Scholar
- 17.Yu, K. (2003) An Elementary Price Index for Internet Service Providers in Canada: A Hedonic Study. Working paper, Department of Economics, Lakehead University, Thunder Bay, OntarioGoogle Scholar