When Do Matched-Model and Hedonic Techniques Yield Similar Measures?
FRB of San Francisco Working Paper No. 2003-14
15 Pages Posted: 27 May 2004
Date Written: June 2003
Abstract
Hedonic techniques were developed to control for quality differences across goods and over time in order to construct constant-quality aggregate price measures. When the available data are a panel of high-frequency data on models whose characteristics are constant over time, matched-model price indexes can also be used to obtain constant quality price measures. We show this by demonstrating that, given data of this type, certain matched-model indexes yield price measures that are numerically close to those obtained using hedonic techniques.
This paper is a condensed version of a paper that was presented at the CRIW workshop on Price Measurement at the NBER Summer Institute, July 31-August 1, 2000 and is available at the NBER website.
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