Revolutionizing Automobile Prices: Quality Change Impact on Consumer Wallets
The article looks at how to accurately measure prices of durable goods like cars when their quality changes over time. It compares different methods for adjusting prices to account for quality changes and finds that some commonly used methods may not always give accurate results. The study suggests that using chain indexes could help solve these measurement problems. The researchers applied these ideas to analyze how car prices changed in Italy from 1988 to 1998.