WHEN DO MATCHED-MODEL AND HEDONIC TECHNIQUES YIELD SIMILAR PRICE MEASURES? Ana Aizcorbe Board of Governors of the Federal Reserve System

Hedonic techniques were developed to control for quality differences across goods and over time in order to construct constant-quality aggregate price measures. When the available data are a panel of high-frequency data on models whose characteristics are constant over time, matched-model price indexes can also be used to obtain constantquality price measures. We show this by demonstrating that, given data of this type, certain matched-model indexes yield price measures that are numerically close to those obtained using hedonic techniques. * This paper is a condensed version of a paper that was presented at the CRIW workshop on Price Measurement at the NBER Summer Institute, July 31-August 1, 2000 and is available at http://www.nber.org. For helpful comments, we thank Ernst Berndt, Jack Triplett, colleagues at the Board and participants of the CRIW workshop. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the members of the Board of Governors or other members of the staff of Federal Reserve System