Document Type

Article

Publication Date

6-2021

Journal Title or Book Title

Journal of Business & Economic Policy

Volume

8

Issue

2

Version

Publisher's PDF

Publisher's Statement

Copyrights for articles published in JBEP are retained by the authors, with first publication rights granted to the journal. The journal/publisher is not responsible for subsequent uses of the work. It is the author's responsibility to bring an infringement action if so desired by the author

DOI

10.30845/jbep.v8n2p1

Abstract

The 2020 COVID-19 pandemic has brought to light a flaw in the accounting and pricing of housing services in consumer spending (PCE) and the consumer price index (CPI). The dramatic shifts in housing usage caused by the pandemic have not registered at all in PCE. This paper takes a fresh look at the use of opportunity costs to measure housing services. It shows how the current gauge can miss real changes in services flows. The paper proposes that housing services be measured instead by hedonic methods, using new survey questions added to the Consumer Expenditure Survey (CES) and the CPI.

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