| Number |
CREPEDP-43 |
| Publication Date |
July 2018 |
| Title |
Housing Rents and Inflation Rates
|
| Author(s) |
Brent W. Ambrose, N. Edward Coulson, and Jiro Yoshida
|
| Abstract |
This paper demonstrates that inflation rates are significantly modified when they are based on the alternative quality-adjusted measure of housing rents that is based on a monthly statistic of landlord net rental income. The official rate was overestimated by 1.7% to 4.2% annually during the Great Recession but underestimated by 0.3% to 0.9% annually during the current expansionary period. We further demonstrate significant impacts of the modified inflation rates on Social Security and real gross domestic product. These impacts persist for a long term because the modified indexes are integrated of order one whereas the official indexes are trend stationary.
|
| Keywords |
measurement error, economic statistics, owners' equivalent rent, Consumer Price
Index, Personal Consumption Expenditures, National Income and Product Accounts.
|
| Other information |
Paper in English (52 pages) |