Rent Indices for Housing in West Germany 1985 to 1998

55 Pages Posted: 11 Feb 2002

See all articles by Johannes Hoffmann

Johannes Hoffmann

Deutsche Bundesbank - Economics Department

Claudia Kurz

Deutsche Bundesbank - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: January 2002

Abstract

In several studies, hedonic methods have been used successfully for the ex post assessment of the accuracy of inflation measurement. Most of those studies relate to high-tech products, with respect to which traditional methods of compiling price indices often fail. We apply hedonic methods to rental housing services, which display less quality progress. However, as German households devote about 10% of their total expenditure to rented housing services, even a small bias in this field might induce a substantial distortion in overall inflation measurement. On the basis of data from the German Socio-Economic Panel, we perform a hedonic analysis of housing rents and compile different price indices. Overall, we conclude that there is some evidence of an understatement of rent inflation in the official rent index for West Germany at the beginning of the 1990s.

Keywords: Consumer Price Index, hedonics, housing, matched models

JEL Classification: C21, D43, D12, E31

Suggested Citation

Hoffmann, Johannes and Kurz, Claudia, Rent Indices for Housing in West Germany 1985 to 1998 (January 2002). Available at SSRN: https://ssrn.com/abstract=299519

Johannes Hoffmann (Contact Author)

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany
0049 69 9566 2320 (Phone)
0049 69 9566 4317 (Fax)

Claudia Kurz

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

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