Cross-validation of quality-adjustment methods for price indexes
Author(s) -
Brian M. Adams,
Alexander Klayman
Publication year - 2018
Publication title -
monthly labor review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.265
H-Index - 54
eISSN - 1937-4658
pISSN - 0098-1818
DOI - 10.21916/mlr.2018.18
Subject(s) - quality (philosophy) , econometrics , economics , price index , actuarial science , epistemology , philosophy
Price index programs may use several quality-adjustment methods, but they often lack guidance on when to use a given method. As part of an effort to improve quality adjustment for network switches in the Producer Price Index, we compare some standard quality-adjustment methods, using cross-validation. For our sample, seemingly reasonable hedonic specifications impute outof-sample prices less accurately than other, traditional quality-adjustment methods.
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