Accounting For Housing In A Cpi
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Accounting For Housing In A Cpi
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Author : W. Erwin Diewert
language : en
Publisher:
Release Date : 2019
Accounting For Housing In A Cpi written by W. Erwin Diewert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
In this paper, we take stock of how statistical agencies in different nations are currently accounting for housing in their consumer price indexes (CPIs). The rental equivalence and user cost approaches have been favorites of economists. Both can be derived from the fundamental equation of capital theory. Concerns about these approaches are taken up. We go on to argue that an opportunity cost approach is the correct theoretical framework for accounting for owner-occupied housing (OOH) in a CPI. This approach, first mentioned in a 2006 OECD paper by Diewert, is developed more fully here. We explore the relationship of this new approach to the usual rental equivalency and user cost approaches. The new approach leads to an owner-occupied housing opportunity cost (OOHOC) index that is a weighted average of the rental and the financial opportunity costs. We call attention to the need for more direct measures of inflation for owner-occupied housing services. In a 2007 paper, Mishkin argues that central banks with supervisory authority can reduce the likelihood of bubbles forming through prudential supervision of the financial system. However, the official mandates of central banks typically focus on managing measured inflation. Barack Obama has pledged to give the Federal Reserve greater oversight of a broader array of financial institutions. We believe that an important addition to this pledge should be to give the BLS, BEA, and Census Bureau the funds and the mandate to aggressively develop improved measures of inflation for owner-occupied housing services. Central banks and national governments have many policy instruments at their disposal that they could use, in the future, to control inflation in housing markets. What they lack are appropriate measures of inflation in the market for owner-occupied housing services. The proposed new opportunity cost measure for accounting for OOH in a CPI will not be simple or cheap to implement. However, the current financial crisis makes it clear that the costs of not having an adequate measure for inflation in the cost of owner-occupied housing services can be far greater.
Accounting For Housing In A Cpi
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Author : W. Erwin Diewert
language : en
Publisher:
Release Date : 2009
Accounting For Housing In A Cpi written by W. Erwin Diewert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Consumer price indexes categories.
In this paper, we take stock of how statistical agencies in different nations are currently accounting for housing in their consumer price indexes (CPIs). The rental equivalence and user cost approaches have been favourites of economists. Both can be derived from the fundamental equation of capital theory. Concerns about these approaches are taken up. We go on to argue that an opportunity cost approach is the correct theoretical framework for accounting for owner-occupied housing (OOH) in a CPI. This approach, first mentioned in a 2006 OECD paper by Diewert, is developed more fully here. We explore the relationship of this new approach to the usual rental equivalency and user cost approaches. The new approach leads to an owner-occupied housing opportunity cost (OOHOC) index that is a weighted average of the rental and the financial opportunity costs. We call attention to the need for more direct measures of inflation for owner-occupied housing services. In a 2007 paper, Mishkin argues that central banks with supervisory authority can reduce the likelihood of bubbles forming through prudential supervision of the financial system. However, the official mandates of central banks typically focus on managing measured inflation. Barack Obama has pledged to give the Federal Reserve greater oversight of a broader array of financial institutions. We believe that an important addition to this pledge should be to give the BLS, BEA, and Census Bureau the funds and the mandate to aggressively develop improved measures of inflation for owner-occupied housing services. Central banks and national governments have many policy instruments at their disposal that they could use, in the future, to control inflation in housing markets. What they lack are appropriate measures of inflation in the market for owner-occupied housing services. The proposed new opportunity cost measure for accounting for OOH in a CPI will not be simple or cheap to implement. However, the current financial crisis makes it clear that the costs of not having an adequate measure for inflation in the cost of owner-occupied housing services can be far greater.
Accounting For Housing In A Cpi
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Author : W. Erwin Diewert
language : en
Publisher:
Release Date : 2009
Accounting For Housing In A Cpi written by W. Erwin Diewert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Consumer price indexes categories.
In this paper, we take stock of how statistical agencies in different nations are currently accounting for housing in their consumer price indexes (CPIs). The rental equivalence and user cost approaches have been favourites of economists. Both can be derived from the fundamental equation of capital theory. Concerns about these approaches are taken up. We go on to argue that an opportunity cost approach is the correct theoretical framework for accounting for owner-occupied housing (OOH) in a CPI. This approach, first mentioned in a 2006 OECD paper by Diewert, is developed more fully here. We explore the relationship of this new approach to the usual rental equivalency and user cost approaches. The new approach leads to an owner-occupied housing opportunity cost (OOHOC) index that is a weighted average of the rental and the financial opportunity costs. We call attention to the need for more direct measures of inflation for owner-occupied housing services. In a 2007 paper, Mishkin argues that central banks with supervisory authority can reduce the likelihood of bubbles forming through prudential supervision of the financial system. However, the official mandates of central banks typically focus on managing measured inflation. Barack Obama has pledged to give the Federal Reserve greater oversight of a broader array of financial institutions. We believe that an important addition to this pledge should be to give the BLS, BEA, and Census Bureau the funds and the mandate to aggressively develop improved measures of inflation for owner-occupied housing services. Central banks and national governments have many policy instruments at their disposal that they could use, in the future, to control inflation in housing markets. What they lack are appropriate measures of inflation in the market for owner-occupied housing services. The proposed new opportunity cost measure for accounting for OOH in a CPI will not be simple or cheap to implement. However, the current financial crisis makes it clear that the costs of not having an adequate measure for inflation in the cost of owner-occupied housing services can be far greater
The Housing Bubble And A New Approach To Accounting For Housing In A Cpi
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Author : W. Erwin Diewert
language : en
Publisher:
Release Date : 2015
The Housing Bubble And A New Approach To Accounting For Housing In A Cpi written by W. Erwin Diewert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Over the course of the recent house price bubble in the United States, the price of homes rose rapidly from 1999 Q4 to 2005 Q4 (11.3% annually as measured by the Case-Shiller index, and 8.4% annually as measured by the Federal Housing Financing Agency) but slowly as measured by owner equivalent rents (3.4%), so measured core inflation remained relatively docile during this period, since only rents are used to measure inflation for housing services in the United States. Over the last several decades, the US Bureau of Labor Statistics (BLS) has experimented with both rental equivalence and user cost approaches for accounting for owner occupied housing (OOH) services in the CPI. We explain the basics of these approaches, and outline the BLS experiences with using them. This assessment leads us to conclude that the time has come to try a new approach: the opportunity cost approach. We argue this approach has advantages over both the conventional rental equivalence and user cost approaches, though it embeds components of the measures for both those approaches and builds solidly on the research of Verbrugge and others at the BLS. Also, we take up empirical issues that must be faced regardless of which of the approaches discussed is adopted. We explain how the repeat-sales and various hedonic regression methods can be placed in a common framework, thereby facilitating understanding of the properties of and the tradeoffs between the methods. We also consider measurement complications that arise because the land and structure components of properties depreciate at different rates.
Measurement Of Homeownership Costs In The Consumer Price Index Should Be Changed
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Author : United States. General Accounting Office
language : en
Publisher:
Release Date : 1981
Measurement Of Homeownership Costs In The Consumer Price Index Should Be Changed written by United States. General Accounting Office and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1981 with Consumer price indexes categories.
Consumer Price Index
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Author : United States. General Accounting Office
language : en
Publisher:
Release Date : 1996
Consumer Price Index written by United States. General Accounting Office and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Consumer price indexes categories.
Funds Needed To Develop Cpi Quality Control System
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Author : United States. General Accounting Office
language : en
Publisher:
Release Date : 1983
Funds Needed To Develop Cpi Quality Control System written by United States. General Accounting Office and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1983 with Consumer price indexes categories.
Handbook On Residential Property Price Indices
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Author : OECD
language : en
Publisher: OECD Publishing
Release Date : 2013-04-22
Handbook On Residential Property Price Indices written by OECD and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-04-22 with categories.
This Handbook provides, for the first time, comprehensive guidelines for the compilation of Residential Property Price Indexes and explains in depth the methods and best practices used to calculate an RPPI.
A Cpi For Retirees Is Not Needed Now But Could Be In The Future
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Author : United States. General Accounting Office
language : en
Publisher:
Release Date : 1982
A Cpi For Retirees Is Not Needed Now But Could Be In The Future written by United States. General Accounting Office and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1982 with Civil service categories.
Section 8 Subsidized Housing Some Observations On Its High Rents Costs And Inequities
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Author : United States. General Accounting Office
language : en
Publisher:
Release Date : 1980
Section 8 Subsidized Housing Some Observations On Its High Rents Costs And Inequities written by United States. General Accounting Office and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1980 with Housing policy categories.