Estimating Hedonic Price Indices for Ground Vehicles (Presentation)

June, 2015
IDA document: D-5525
FFRDC: Systems and Analyses Center
Division: Cost Analysis and Research Division
David M. Tate, Stanley A. Horowitz See more authors
When goods persist in the marketplace over time, price indices can be computed directly from observed prices. Hedonic models are used to estimate real price growth for goods that do not persist in the marketplace long enough to establish a price change history. Hedonic models attempt to explain as much price change as possible using observable quality features. We describe challenges in developing a hedonic price index for military vehicles, and propose an alternative pseudo-hedonic model based on hypothesized unobservable quality growth within in vehicle families.