Production Technologies of the U.S. Boiler and Turbogenerator Industries and Hedonic Price Indexes for Their Products: A Cost-Function Approach

Abstract

The hedonic approach has been proposed and used as a method to obtain quality-adjusted (hedonic) price indexes for the durable goods. The previous hedonic studies did not seem to pay careful attention to the economic factors which determine the functional forms of hedonic regression equations. This paper tries to analyze those factors for the U.S. boilers and the turbogenerators purchased by the U.S. steam electric power industry. This goal amounts to analyzing the production technologies of the industries producing these products under the maintained hypothesis of markup pricing. After analyzing them, we obtain the hedonic price indexes.