Hedonic Regressions and Price Indices - Application to the Personal Computer Price Index in Croatia

Sa？etak Different quality adjustment methods have been used in the consumer price index compilation process in market economies. During the last few years the application of the hedonic regression method has increased markedly. This paper describes the method in short, overviews its use for statistical and other purposes, and discusses the possibility of its implementation in the price index compilation in Croatia. Personal computers were chosen for the empirical exercise. The main reason is that their share in the household consumption is increasing, while another reason lies in the fact that literature suggests the hedonic regression method should initially be applied to the personal computer sub-index