1. bookVolume 38 (2022): Issue 1 (March 2022)
    Special Issue on Price Indices in Official Statistics
Journal Details
License
Format
Journal
eISSN
2001-7367
First Published
01 Oct 2013
Publication timeframe
4 times per year
Languages
English
access type Open Access

Rentals for Housing: A Property Fixed-Effects Estimator of Inflation from Administrative Data

Published Online: 29 Mar 2022
Volume & Issue: Volume 38 (2022) - Issue 1 (March 2022)<br/>Special Issue on Price Indices in Official Statistics
Page range: 187 - 211
Received: 01 Dec 2019
Accepted: 01 Dec 2021
Journal Details
License
Format
Journal
eISSN
2001-7367
First Published
01 Oct 2013
Publication timeframe
4 times per year
Languages
English
Abstract

Official rentals for housing (rent) price inflation statistics are of considerable public interest. Matched-sample estimators, such as that used for nearly two-decades in New Zealand (2000–2019), require an unrealistic assumption of a static universe of rental properties. This article investigates (1) a property fixed-effects estimator that better reflects the dynamic universe of rental properties by implicitly imputing for price change associated with new and disappearing rental properties; (2) length-alignment simulations and property life-cycle metrics to inform the choice of data window length (eight years) and preferred splice methodology (mean-splice); and (3) stock-imputation to convert administrative data from a ‘flow’ (new tenancy price) to ‘stock’ (currently paid rent) concept. The derived window-length sensitivity findings have important implications for inflation measurement. It was found that the longer the data window used to fit the model, the greater the estimated rate of inflation. Using administrative data, a range of estimates from 55% (window length: three-quarters) to 127% (window of 90-quarters) were found for total inflation, over the 25-years to 2017 Q4.

Keywords

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