Expanding and Revising the Application of Hedonic Quality Adjustment in the Corporate Goods Price Index
August 28, 2026
FUJII Kentaro*, HIROTA Mihina**, YAMAUCHI Yuriko, MASUJIMA Ayako, GEMMA Yasufumi
*Currently at the Hakodate Branch
**Currently at the Sendai Branch
Research and Statistics Department
Abstract
The Corporate Goods Price Index (CGPI) employs the hedonic method for quality adjustment. This statistical method estimates the relationship between product quality and prices in an objective manner. Its strength lies in its ability to accommodate a wide range of quality variations, and it is currently applied to five items, including passenger cars. In conjunction with the process for the rebasing of the CGPI to the 2025 base year, we are considering expanding the range of products quality-adjusted using the hedonic method and modifying the hedonic quality adjustment method for certain products as follows: (i) newly applying a time-dummy hedonic method to microprocessors (MPUs) to appropriately capture price trends amidst rapid product cycles; (ii) applying to passenger cars a hedonic method that accounts for quality differences in advanced autonomous driving technology; and (iii) applying separate hedonic models to interchangeable-lens camera bodies and lenses in order to evaluate lens performance differences in more detail. These initiatives are expected to improve the accuracy of quality adjustment in the CGPI.
Notice
The Bank of Japan Review Series is published by the Bank to explain recent economic and financial topics for a wide range of readers. This report, 2026-E-11, is a translation of the Japanese original, 2026-J-8, published in June 2026. Views expressed are those of the authors and do not necessarily reflect those of the Bank.
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