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
Cramer, J. S., ‘Een prijsindex voor nieuwe personenauto's, 1950–1965,’Statistica Neerlandica, XX (1966), pp. 215–224.
Cramer, J. S., ‘Autoverkopen en autopark in Nederland,’Statistica Neerlandica, XXII (1968), pp. 119–132.
Griliches, Z., (ed.),Price Indexes and Quality Change, Cambridge, 1971.
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.
Dhrymes, Ph. J., ‘Price and Quality Changes in Consumer Capital Goods,’ [3], pp. 88–149.
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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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DOI: https://doi.org/10.1007/BF01680115