Disentangling rent index differences data, methods, and scope by Brian Adams... [et al.]
Contributor(s): Adams, Brian
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Material type: 
ArticlePublisher: 2024Subject(s): INDICES DE PRECIOS | POLITICA MONETARIA | INFLACION | POLITICA DE VIVIENDA
In:
The American Economic Review v. 6, n. 2, June 2024, p. 230-245Summary: Rent measurement determines 32 percent of the CPI. Accurate rent measurement is therefore essential for accurate inflation measurement, but the CPI rent index often differs from alternative rent inflation measures. Using repeat-rent inflation measures created from CPI microdata, we show that this discrepancy is largely explained by differences in rent growth for new tenants relative to all tenants. New-tenant rent inflation provides information about future all-tenant rent inflation, but the use of new-tenant rents is contraindicated in a cost-of-living index such as the CPI. Nevertheless, policy-makers should integrate new-tenant inflation into inflation forecasts and monetary policy decisions.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
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Rent measurement determines 32 percent of the CPI. Accurate rent measurement is therefore essential for accurate inflation measurement, but the CPI rent index often differs from alternative rent inflation measures. Using repeat-rent inflation measures created from CPI microdata, we show that this discrepancy is largely explained by differences in rent growth for new tenants relative to all tenants. New-tenant rent inflation provides information about future all-tenant rent inflation, but the use of new-tenant rents is contraindicated in a cost-of-living index such as the CPI. Nevertheless, policy-makers should integrate new-tenant inflation into inflation forecasts and monetary policy decisions.
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