Hedonic prices indexes for new passenger cars in Portugal (1997-2001)

Hugo J. Reis, J. M. C. Santos Silva*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

28 Citations (Scopus)


This paper evaluates the effects of quality change on the price index for new passenger cars in Portugal for the years 1997-2001. Hedonic regression models are studied, giving particular emphasis to the relation between the form of the price index and the econometric techniques used for inference. The results of the empirical part of the paper indicate that during this period the changes in the quality of new cars sold in Portugal are responsible for price increases averaging 4.8% per year. Because this quality change was not entirely taken into account, in recent years the CPI component corresponding to the sales of new passenger cars may have been overestimated by as much as 2.2 percentage points per year. This corresponds to an overestimation of the overall CPI by about 0.15 percentage points per year.

Original languageEnglish
Pages (from-to)890-908
Number of pages19
JournalEconomic Modelling
Issue number6
Publication statusPublished - Dec 2006
Externally publishedYes


  • CPI bias
  • Parameter stability
  • Weighted least squares


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