Price indexes can be constructed using a "hedonic method" that adjusts for changes in the quality of a product by focusing on a set of key product characteristics. This handbook contributes to a better understanding of the merits and shortcomings of conventional and hedonic price indexes and methods, and provides an analytic basis for choosing among them. It sets out "best practice" principles for constructing hedonic indexes and examines criticisms of hedonic indexes. The handbook brings together material that is now scattered in a wide number of places, but goes beyond the economic literature in significant respects. It has been written because there is a widespread view that the principles for conducting hedonic investigations are not readily assembled for statistical agency work, which is the primary audience of this volume.
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