1. Modelling Scale Effect in Crosssection Data:The Case of Hedonic Price Regression
- Author:
- Duo Qin and Yimeng Liu
- Publication Date:
- 09-2013
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- An innovative and simple experiment with cross-section data ordering is carried out to exploit a basic and common feature between many economic variables – nonlinear scale dependence. The experiment is tried on hedonic price regression models using two data sets, one for automobiles and the other computers. The key findings are: (a) Hedonic price indices can be significantly biased if they are constructed using models which disregard possible nonlinear scale effects latent in random data samples; (b) Scale-based data ordering offers considerable potential to filter such scale-dependent information from cross-section samples; (c) The filtering can be easily carried out by systematic adoption of dynamic modelling methods.
- Topic:
- Science and Technology, Economic Theory, Models, and Price Regression
- Political Geography:
- Global Focus