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I'm not an economist and I am little confused. I want to build a hedonic model and regression for analyzing price evolution of some product (e.g. computers) on the market and hedonic price/quality indices. The analysis shoud be based on two points:

  1. before entry of a new player on the market (period of two years) and
  2. after entry of a new player on the market (period of three years).

Some of the products in the "after" period have characteristics which products in the "before" period don't have.

How should I do it: to gather computer data (prices, characteristics) for every year of the sample, then make regression equation based on different models (double-log, semi-log, linear), right?

Then, this equation will serve to estimate computer prices that eventually were not part of the observed sample?

How to find prices for products that have different characteristics (e.g. with CD ROM or without)?

What exactly hedonic price/quality index represent?

Please help me with some guidelines and advices. I've been studying hedonic model/regression for the last days and I'm all confused.

Many thanks.

J.

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Here is a monograph from Jack Triplett who is known about using this methodology:

browse.oecdbookshop.org/oecd/pdfs/free/9306081e.pdf

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