Hedonic Price Indices: Application to the Russian Market

Abstract

In this paper discussed is the question of using the hedonic method when constructing price indices adjusted for changes in the quality level of goods on the Russian market. In the first part of the paper several foreign works devoted to the application of the method to various groups of goods are reviewed. Also, there is a short review of real-life usage of the method by BLS, Census bureau and BEA.

In the second part an example of the application of the hedonic approach to Russian data based on information on prices and characteristics of mobile phones according to the Yandex. Mar­ket portal in the period from July 2019 to September 2021 is described. It is shown that the hedonic method is applicable in Russian conditions and shows statistically significant differences between the observed price change and the estimated adjusted indices. However, the lack of the necessary statistical information does not make it possible to adjust official price indices by the quality of goods.