EUA: prêços aumentam 400%, mas nas fórmulas mágicas do governo, houve redução de 7%.
In a time of rapid technological development, the quality as measured by HQR will increase by orders of magnitude more than prices. Consider Moore’s Law, which correctly postulated that the number of transistors on computer chips would double every two years; prices can’t possibly keep up with that kind of quality increase (save for hyperinflation, more on that later). The BLS neatly illustrates this effect with an example from their website (emphasis is mine):
Item A is a television that is no longer available and it has been replaced by a new television, Item B. The characteristics in bold differ between the two TVs. There is a large degree of quality change and there is a very large (400%) difference in the prices of these TVs.Rather than use the 400 percent increase in price between Item A and Item B, the quality adjusted rate of price change is measuredby the ratio of the price of Item B in the current period ($1,250.00) over an estimated price of Item B in the previous period – Item B’. Here is an example of a hedonic regression model (including coefficients) for televisions
Where PB,t+s-1 is the quality adjusted price, PA,t+s-1 is the price of Item A in the previous period, and is the constant e [SIC], the inverse of the natural logarithm, exponentiated by the difference of the summations of the ßs for the set of characteristics that differ between items A and B. The exponentiation step is done to transform the coefficients from the semi log form to a linear form before adjusting the price.
To put it another way, the HQR extrapolates a price for the new TV using the Hedonic Quality model estimated from the population of old TV’s.
