Staff Working Papers

Working Paper 03-3: Aggregation Bias and the Repeat Sales Price Index

Author(s): Anthony Pennington-Cross, Senior Economist

Abstract: ​This paper examines whether any consistent bias can be found in the creation of a repeat sales price index at the state level. This is done by comparing a transaction-based index with a housing-stock-based index. The housing-stock-based index weights each observed repeat transaction by the amount of housing it represents. Therefore, the aggregate or regional index should reflect the true appreciation of house prices.