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The following HTML text is provided to enhance online readability. Many aspects of typography translate only awkwardly to HTML. Please use the page image as the authoritative form to ensure accuracy. TABLE 4-2 Major Effects on CPI Indexes from Five BLS Hedonic Studies
quotes) to 21. For VCRs the noncomparables decreased from 63 (out of 130) to 47. BLS explains why using a hedonics system might identify different non-comparable cases from a given set of substitute quotes (Thompson, 2000:5): For the purpose of calculating the quality adjusted index, all the substitutions were reevaluated. One of the benefits of using a hedonic model in evaluating substitutions is that the analyst has an opportunity to review price data and item characteristics with a statistical tool, thus enabling him/her to render judgments based on statistics rather than expert judgment alone. When BLS uses hedonics, comparability of substitute quotes is judged not in terms of an a priori determination about the amount of quality change, but by the extent to which price change is predicted by the regression equation.34 For substitute price quotes, “differences in the specification or characteristics data of the old and new items were identified to see if the parameter estimates in the hedonic model could be utilized to quality adjust the official price change” (Thompson,
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