Another Look At Nonresidential Building Prices

In the early 1990's, former BEA Chief Statistician Frank de Leeuw explored the possibility of using project data from F.W. Dodge to estimate hedonic price indexes for nonresidential buildings. He rejected the idea citing the lack of “quality” characteristics in the data and that the results were not much different from the indexes currently in use. This paper re-examines the feasibility of price indexes using the Dodge data set. Using data for a single state, Maryland, price indexes for seven types of nonresidential buildings were estimated and were found to be reasonable. This paper concludes that the use of Dodge data as the basis for price indexes are feasible and worthy of further investigation.