BLS WORKING PAPERS

U.S. DEPARTMENT OF LABOR

Bureau of Labor Statistics

 

OFFICE OF PRICES AND LIVING

CONDITIONS

Using Hedonic Methods for Quality Adjustment in the CPI:

The Consumer Audio Products Component

Mary Kokoski, U.S. Bureau of Labor Statistics

Keith Waehrer, U.S. Bureau of Labor Statistics

Patricia Rozaklis, U.S. Bureau of Labor Statistics

Working Paper 344

March 2001

 

The views expressed are those of the authors and do not necessarily reflect the policies of the U.S. Bureau of Labor

Statistics or the views of other staff members.
Using Hedonic Methods for Quality Adjustment in the CPI:

The Consumer Audio Products Component

Mary Kokoski, Keith Waehrer, and Patricia Rozaklis

Division of Price and Index Number Research

U.S. Bureau of Labor Statistics

2 Massachusetts Avenue, NE

Washington, DC 20212

Kokoski_m@bls.gov

April, 2000
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Abstract

There has been a strong recommendation that the BLS explore the use of hedonic regression

methods for quality adjustment in the Consumer Price Index (CPI). Until recently data limitations have

made this goal difficult to implement for many categories of goods and services. This paper reports the

preliminary results of employing data purchased by BLS from an outside source to produce hedonic

regression-based quality-adjusted price indices for consumer audio electronics products. The effects of

hedonic-based quality adjustment are examined. Hedonic indices are derived directly from the regression

coefficients, and compared to the adjusted CPI values. Issues of regression specification, and practical

problems for CPI quality adjustment are also addressed.
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I. Introduction

There has been strong recommendation that the BLS explore the use of hedonic methods for

quality adjustment in the Consumer Price Index (CPI) for decades. The Price Statistics Review

Committee (the Stigler Commission Report) in 1961 expressed the view that hedonic analysis would

provide a “more objective” approach to addressing quality change than the BLS standard methods of

dealing with this issue (Triplett (1990)). More recently, the Advisory Commission to Study the

Consumer Price Index (the Boskin Commission Report, 1996) reiterated this recommendation,

recognizing that accurate measures of quality change will enable a more accurate measure of pure price,

or “cost-of-living” change. Categories of goods and services where quality changes are frequent and

relatively easy to identify are the best candidates for using hedonic methods, given that data can be

acquired.

A price index, such as the CPI, intends to measure the effects of price changes while holding

other economic factors, such as the physical attributes of the goods available, constant. In the real world,

however, goods and services are always changing in their physical characteristics. This makes it

necessary to find some method of subtracting out the value of quality change when the market basket and

prices change. Traditionally, the BLS has used several methods of quality adjustment. These include

overlap pricing, direct quality adjustment using information from producers, and linking methods.

Basically, all of these methods rely upon the subjective assessment of BLS personnel (commodity

analysts) in selecting newly appeared products that most closely match the disappearing ones.

 Hedonic methods have been incorporated into the BLS toolkit for housing (to correct for age

bias) and apparel commodities for several years. A more recent initiative in 1999 has introduced the use

of hedonic methods for quality adjustment for personal computers, televisions, consumer audio

equipment, VCRs, camcorders, DVD players, and even college textbooks (Fixler, Fortuna, and Lane

(1999). Research is underway to evaluate these methods for refrigerators, microwave ovens, telephone

services, cable television, and other goods and services. Most of these applications have required

expanding the size and range of the sample of specific items in each respective category. In the CPI, the

sample size for a category of good or service is a function of the relative importance of that category in

the average consumer household’s total annual average expenditures. For many types of goods and

services where hedonic methods are likely to be useful, the sample of CPI data is too small for such an

empirical application. Possible solutions to this problem are to collect additional observations on these

goods for this purpose or to use supplementary data sources to provide hedonic coefficient estimates that

may be used for quality adjustment when substitutions occur in the CPI sample.
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 For consumer audio products, the BLS is investigating the use of hedonic-based quality

adjustment methods from detailed and extensive market data acquired from NPD (Intelect Group, Inc.).

In this paper we present the preliminary results of this effort, examining the effects of quality adjustment

on this CPI component by comparing adjusted index values to a simulated unadjusted CPI audio

component. We discuss issues of regression specification, practical problems encountered in integrating

results from other data sources into the CPI item structure, and also compare quality-adjusted results to a

direct hedonic index from the NPD regressions themselves.

II. Hedonics and Quality Adjustment in the CPI

Quality Adjustment in the CPI:

The purpose of a consumer price index is to measure the effects of price changes on consumer

households. In a true cost-of-living index, substitution behavior in response to price changes is

incorporated, and the index compares two price regimes with respect to a fixed reference level of

satisfaction. If a fixed weight formula, such as the Laspeyres, is used for the index, relative prices of

items are compared with respect to a fixed market basket of goods and services. In either case, it is

assumed that the spectrum of products, and the available attributes of the goods or services from which

the consumer may choose are the same in both the reference and comparison periods.

 In practice, however, the specific items on the market are often changing. Models disappear and

new, different ones appear to take their shelf space. Sometimes the differences between old and new

models are minor, or are regarded as such by the consumer. Sometimes qualitative changes can occur

which make the new products difficult to compare to the old ones. At the extreme are goods which are

sufficiently different from other items on the market as to be categorized “new goods”, since they embody

attributes, or specific combinations of attributes, which existing goods lack (e.g. cellular telephones, and

recordable portable minidiscs). These physical changes in consumer products and services can be

observed, but their value to the consumer must be excluded from a consumer price index measure. Thus,

they must be identified, categorized and/or quanitified, and their implicit value to the consumer estimated.

The treatment of quality changes in the CPI has varied according to the nature and degree of the

change, feasible methods for making an adjustment, and available data resources. Whether implicitly or

explicitly, these adjustments attribute the observed price change between two goods as: (a) entirely to

price change, (b) entirely to quality differences, or (c) partially to price change and the balance to quality

difference (Kokoski (1993)). Where the observed differences between a new and disappearing product
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are negligible (e.g. brand of bran flake cereal), the price collector usually simply substitutes the new

product for the old one. This is termed a comparable substitution and it implicitly attributes all of any

observed price difference between the two products to pure price change. Product “downsizing”, as when

16-ounce cans of tomato sauce are replaced by otherwise identical and similarly priced 14.5-ounce cans,

also attributes all of the difference in price-per-ounce to pure price change (Kokoski (1993)).

When qualitative attributes between two goods are judged to be more important, then one of

several methods of noncomparable substitution is employed. One such method, used when both the old

and new product are present in at least one time period, is overlap pricing. In that overlap period, say

period t, the price change for the item category represented by these products is given by the price change

for the old product between period t-1 and period t. The price relative for this item category between

periods t+1 and t is represented by the new product. Empirically seamless, this method does not require

direct comparison of the prices or attributes of the two products. It implicitly attributes all of any

difference in price between the old and new products to real quality difference. Where information is

available on the additional cost to producers of making a specific change in the attributes of a product,

then a direct quality adjustment may be made. This cost is then subtracted from any observed change in

the price paid by the consumer for the new instead of the old product (Triplett (1988)). This direct

method assumes that the perceived value of the quality change to the consumer is the same as the cost

incurred by the manufacturer to provide it.

In the absence of either overlapping prices or independent information from producers on the

costs of qualitative changes, a linking method is employed to make noncomparable substitutions. Aside

from sample rotations, when entirely new and independent product samples are drawn for the CPI, linking

techniques are the most prevalently used in the CPI (Armknecht and Weyback (1989), Fixler (1993)). In

this case the old product makes its final appearance in period t-1 and the new product, which effectively

replaces it on the retail shelf, first appears in period t. Since the two products cannot be directly

compared in the same time period, the price change between period t-1 and period t for this good is

proxied by the observed price change between these two periods by other goods in the same goods

category. The new product then represents the good in the price index for subsequent time periods. This

method assumes that pure price changes are likely to be the same for all goods in a class (e.g. price

changes for cotton Oxford shirts will be the same as for other types of shirt). By implicitly imputing a

price to the new product in period t-1, had it existed then, this method attributes some of the price

difference between the new and old products to pure price change and the rest to quality differences

between the two products (Kokoski (1993)). All of the above methods would miss any pure price change

imposed by the producer at the opportunity offered by model changeovers.
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In all these cases, some degree of judgment by the BLS commodity analyst is required. For

comparable substitutions, the analyst selects the new item which most closely resembles the old one and

judges any differences between them to be negligible. For noncomparable substitution methods, the new

item is still chosen on the basis of this criterion, and then quantitative adjustments applied as the new item

enters the index.

The currently preferred method of quality adjustment is the hedonic method. This method (or

class of methods (Triplett (1990)), relies on statistical techniques to estimate the implicit prices of product

characteristics from observed prices and quantities sold in the marketplace. These implicit prices may

then be used as measures of the value of observable qualitative differences in products to consumers, and

thus help disaggregate the observed price difference between two products into quality change and pure

price change. The first application of hedonic methods to the CPI was in the apparel categories

(Armknecht (1984), Armknecht and Weyback (1989)). Initially, hedonic regressions were estimated on

the CPI sample, and the coefficient values for the attributes used to provide a structured set of criteria for

selecting the most comparable substitute for a disappearing item. For example, if the fiber content of a

jacket was statistically significant and a quantitatively substantial attribute in determining the jacket’s

price, then the new jacket chosen for the CPI sample would have to have the same fiber content as the old

one. This procedure then advanced to using the hedonic regressions to provide estimates of quality change

directly into the index (Liegey (1993), Armknecht, Moulton, and Stewart (1995)). For example, when a

new jacket was brought into the index to substitute for a disappeared one, its introductory price was

quantitatively adjusted based on the coefficients from the hedonic regression on that apparel category.

The use of hedonic regressions in apparel employed the data collected by BLS for the CPI, and was

facilitated by a fairly large sample, and relatively easily identified and empirically manipulated

characteristics information from the CPI checklists.

Hedonic methods are now used for other categories of goods and services in the CPI. These

include personal computers, televisions, consumer audio equipment, VCRs, camcorders, DVD players,

and even college textbooks. Proposals to do the same are currently being evaluated for refrigerators,

microwave ovens, washers and dryers, telephone services, and cable television. In some cases, a larger

number of price quotes is being collected to expand the sample and thus provide a sufficiently large

database for estimating hedonic regressions. Because expanding sample size is not a costless endeavor, in

other cases the BLS has acquired information from data sources outside the agency for this task. These

include data purchased from A.C. Nielsen, collected from electronic scanners in retail outlets, data

gleaned from published sources such as Consumer’s Digest (Liegey and Shepler (1998)), and data

purchased from independent firms which collect and process retail transactions information. For

consumer audio products, data are being purchased from NPD. While large and detailed, these other data
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resources do present some additional issues for quality adjustment of the CPI: (a) the samples are not

collected under the same probability sampling procedures used for the CPI sample, so the relative degree

of representation of specific models in the respective samples will differ, (b) the item definitions,

categorization, and attributes identified will differ, and c) the representative outlets from which the BLS

collects price quotes for the CPI differs from those sampled by other data sources, thus effecting the

product mix and prices.

Hedonic Methods for Quality Adjustment:

The concept of empirical hedonic analysis can be traced to the 1930s (Court (1939)), and its

application to price indices to a major work by Griliches (1961). Since then theoretical foundations have

been established, and debated, for the methodology and its interpretation in economics. The theoretical

basis is attributed to Rosen (1974), whose model describes a market equilibrium in which consumers

select goods on the basis of the characteristics they embody, and implicit prices for these characteristics

emerge which represent the value placed on them by consumers. These implicit prices represent

equilibrium prices in characteristics space, tangency points between production isoquants and consumer

indifference curves in “implicit markets” for characteristics. A large literature exists on the interpretation

and empirical applications of hedonics, and a useful summary of the basic concepts and issues are

available in Triplett (1986), (1988), (1990)).

At the most general level, the hedonic function describes the relationship between the observed

market prices of physically heterogeneous goods and the amount of various characteristics which these

goods embody. The hedonic hypothesis states that “heterogeneous goods are aggregations of

characteristics, and economic behavior relates to the characteristics” (Triplett (1988), p. 630). For

consumer price index applications, it is the consumer side of the behavioral equation which is of most

interest. It is assumed that the consumer optimizes his consumption of characteristics by choosing the

good which is closest to his or her optimal bundle of characteristics, given his or her budget constraint

and the implicit prices of those characteristics. The implications of this behavior depend on more explicit

assumptions of the nature of the relationship between goods and characteristics: there may or may not be

a continuous spectrum of goods varieties embodying various levels of various characteristics;

characteristics may or may not be amenable to “repackaging” by the consumer (analogous to the

separability problem in goods space) (Fisher and Shell (1972)); and, the information supplied by the

model does not necessarily inform about the function and parameters of the demand function.

Nonetheless, there appears to be a consensus that empirical hedonic analysis does provide

meaningful information for inferring the value consumers place on quality changes, and the estimates
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from hedonic regressions can be reliably used to make quality adjustments to price indices (Triplett

(1988), (1990)). This may be done in one of several ways. First, one can identify a disappearing product

and select a substitute, then make a quality adjustment to the observed price of one or the other item to

make them statistically comparable in quality. These are “indirect methods”. In one such method, one

would multiply the hedonically-derived implicit price of a characteristic by the difference n the level of

that characteristic between the old and new product. One then subtracts this quality change value from

any observed price difference between the two products. Another such method is to impute the price of

an item in a period before it appeared on the market, using the hedonic coefficients and the observed

characteristics of the product at issue. This imputes a reservation price for the newly appeared good.

Alternatively, one could adopt a “direct method”. Under this approach one estimates a quality adjusted

price index directly from the hedonic regression itself. Along with the characteristics variables, one

specifies time period dummy variables in the hedonic regression; the coefficients on these time dummies

are then interpreted as the price differences between the specified period and the reference period net of

changes in the quality attributes of the goods available in each period (Triplett (1986). If the relative

weights of each characteristic, or the models embodying them, remain the same, then these methods

should, in principle, yield similar results. In practice, since the direct method relies upon samples from

different time periods, it is unclear how the characteristics’ implicit values, and therefore the regression

coefficients, may change over time as the overall product market evolves.

Whichever method of hedonic quality adjustment is applied, there are several empirical issues to

be addressed. The issue most familiar in the hedonic literature is that of choosing an appropriate

functional form. Theory does not provide guidance on this issue and much debate has been waged on it in

the empirical context. Although other forms cannot be ruled out a priori (see, for example, Arguea and

Hsiao (1993)), the most empirically convenient has not been demonstrated inferior in most applications,

either. This is the semi-logarithmic form, where the log of the good’s price is regressed on a linear

specification of the characteristics, and time dummies where desired (Griliches (1971), Triplett (1987)).

In the context of quality adjustment of intertemporal price indices, the stability of the hedonic

regression coefficients over time is an important concern. Hedonic regressions are often estimated on a

cross-section sample, and thus capture a snapshot of the market at a point in time. As the varieties of

goods available, and other factors change, the relationship between the goods’ characteristics and their

implicit prices may change (i.e. shifting demand and supply curves in the implicit characteristics

markets). Thus, the hedonic coefficients from one empirical study may not provide reliable quality

adjustments for the index in future periods. Even in regression equations which include time dummies, it

may not be reasonable to assume that the coefficients on the characteristics variables are constant over the

whole sample. Edmonds (1985) found in his study on housing that his hedonic model was stable, but this
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observation cannot be generalized. Silver (1998) has identified as a potential source of price index bias

changes in the pricing strategies for existing models by companies as they begin to market new ones.

This effect could also be reflected in characteristics space, as companies change the implicit prices

offered for various attributes of the goods (for example, wireless headphones might begin to replace the

wired ones which are bundled in models of portable stereos). If hedonic methods are used to adjust a

price index, it is prudent to estimate the model again periodically, and attempt an analysis of the

conditions under which the model coefficients change, and are thus likely to change in the future.

Other empirical issues relate to the quality and quantity of data available for performing the

hedonic analysis. Errors in measurement of characteristics variables can be important (Epple (1987)).

Especially in cases where data are acquired from other firms or agencies, it is important to assess how

these data are collected and the nature of any averaging or imputation applied to them before using them

to specify hedonic regressions to be applied to independent samples such as the BLS data. It is important

that economically relevant characteristics information be provided by the data, so that the regression

specification is meaningful. Another important consideration is that these data represent transactions, not

list prices, since the former are the market prices which reflect consumers’ preferences through their

demand behavior. It is also likely that for many durable goods categories, such as electronics products,

few consumers pay full list price and the relationship between list price and the average market retail

price is unknown. Another concern is the potential for selection bias in the outlet or product sample,

which may result from the methods used to collect the data (e.g. only outlets which use electronic

scanners) or package it (e.g. elimination of outliers, imputation of missing values, substitutions among

items).

III. Application to the Consumer Audio Products Sector

The Consumer Audio Products Market:

Consumer audio products comprise heterogeneous categories of durable goods. These range

from home stereo receivers, amplifiers, and loudspeakers to pocket-sized headphone radio/cassette

players. Individual products range in price from thousands of dollars to less than twenty dollars. Because

most consumer audio products are physically durable for decades, technological obsolescence is the main

reason for the consumer to replace or add to his or her stock of these goods. Product innovations range

from making portable radios smaller and increasing the number of compact discs that can be

accommodated by a CD player to major upgrades such as the replacement of turntables by compact disc

players. In many respects, this class of products is not unlike personal computer goods. As with computer
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hardware, the specifications which describe quality changes are usually easy to identify and quantify (e.g.

watts per channel, frequency range, size), and there are many brands, models, and varieties of features on

the market. These quantifiable aspects of the consumer audio product category facilitate hedonic analysis.

The merging of video products and computers with audio products is occurring, as evidenced by

the market proliferation of home theatre systems, magnetically shielded computer speakers, Internet

radio, and compression algorithms which permit music and voice to be downloaded digitally from the

Internet. The Consumer Electronics Manufacturers Association reports that consumers are seeking to

complement their home theater systems with high performance audio goods. 1 As household penetration

of home theater systems increases, demand for high performance audio goods will rise, effecting product

quality and prices in the overall audio product market.

The consumer audio products market is an interesting candidate for hedonic analysis also because

of technological innovations that have recently occurred, but have yet to penetrate the U.S. market. The

MiniDisc, originally introduced as a digital replacement for the analog cassette, offers the portability of a

headphone cassette player, the sound quality of a CD player (with less skipping), and the ability to make

custom digital recordings directly from CDs. At present, consumer satisfaction with analog cassettes and

the prevalence of CDs has left U.S. consumers disinterested in the new format. As digital products gain

consumer acceptance and more prerecorded music becomes available on MiniDisc, consumer demand is

likely to increase. As electronic products become digital, more of these once distinct and separate

products can begin to interact and communicate with each other.

MiniDisc represents a new good, but one which combines attractive attributes of several goods

familiar to the consumer. These changes provide an opportunity to examine the implications of new

goods as they begin to affect the market. Is it possible, for example, to predict the market price of a

MiniDisc unit, based on the hedonic coefficients of its attributes as embodied in other established

products and other empirical information?

The audio products market is summarized in Figure 1, which shows the number of units sold by

product category from February 1997 through March 1999based on the NPD data (described in the next

section). Figure 2 shows the relative proportion of consumption devoted to each audio product category,

averaged over the February 1997 through March 1999 period. Portable CD Players and headset stereos,

part of the portable audio market, are the largest selling items. Figure 2 suggests that shelf systems,

which are similar to but smaller than rack systems, are rising at the latter’s expense. This finding

confirms claims by the Consumer Electronics Manufacturers Association that consumers are moving

towards sleeker compact systems and away from large rack systems. Figure 3 shows the average vintage

 

1

 Consumer Electronics Manufacturers Association, 1996. "Consumers Looking to Enhance Home Theater with

High Performance Audio."
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of specific items in each category, or the average number of years that a specific make and model is

extant in the market, as of March 1999. These vintages do not vary much by category.

The Data:

The data used in the hedonic regression analysis were purchased by the Bureau of Labor Statistics

from NPD, a private firm which specializes in the collection and packaging of such market data for sale.

These data were generated from point-of-sale observations in various retail chain outlets and each

observation represents the average price for a specific product model over a bimonthly (before January

1998) or monthly (after January 1998) period for each of several classifications of retail outlet types

called “channels.”

The NPD data consist of thirteen categories of products: CD players, portable radios, solid state

recorders, portable tape recorders, portable radio cassette players, stereo headset, stereo headphones,

receivers/amplifiers/tuners, cassette decks, home speakers, one brand rack systems, and shelf systems.

The channels represented in the data include department stores, mass merchandisers, electronics specialty

stores, and catalogue showrooms. Each observation consists not only of an average price, but also

includes information on the physical attributes of each model and number of units sold. The BLS has

been purchasing these data since the February/March bimonthly installment in 1997, and, for each such

installment performing a preliminary analysis to check for errors or inconsistencies, and correcting them

where necessary. For the purposes of empirical analysis over all these data installments, the monthly data

were averaged to create bimonthly periods of data for years 1998 through January 2000.

The price and quantity observations supplied by NPD are national estimates. NPD receives data

from a subset of all the outlets that sell consumer audio electronics products. The unit sales reported by

these chains are then extrapolated to reflect national aggregate sales and expenditures. The extrapolation

process is straightforward. First, the chains within the sample are categorized into channels. Then, the

chains within each channel are assigned to cells depending on their total revenue and the number of stores

in the chain. Each chain is then assigned an adjustment factor corresponding to the number of chains with

similar size characteristics, nationally divided by the number of chains with similar characteristics in the

NPD sample. This adjustment factor is used as a weight when aggregating chain level data on units sold

and total expenditures. The average price reported for each model is then calculated by dividing total

expenditures on that model by the total number of units of that model sold.

Although these data do not consist of individual retail transactions, they do represent a much

larger number of transactions and models of products than the BLS data. They also include detailed

characteristics information, as well as information on the first date when each particular model appeared
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in the NPD sample. If the inaugural date of appearance of a model is known, then these data could

potentially provide quantitative information that would help track price change over the life cycle of a

model. Vintage information is useful in ascertaining the introduction and proliferation of new

technologies in the audio products market.

Audio product data collected by the Bureau of Labor Statistics are classified in an item stratum

called "Audio Equipment: RA05." For each monthly index, approximately 167 price quotes are used to

construct the price index for item stratum RA05. Data are further broken down into car audio equipment

and non-car audio equipment. A CPI checklist for the audio equipment item stratum is included as

Appendix Figure 1. Attribute data collected by the BLS are somewhat limited in scope and do not capture

important product characteristics such as product introduction date, buffer memory, and recent

technological advancements such as surround sound capabilities. Several variables that appear on the

checklist are difficult to use in the context of hedonic regression analysis. These factors, as well as small

sample size, prevented the use of CPI data in hedonic regressions. Therefore, we used the NPD sample to

obtain coefficient estimates to quality adjust goods in the CPI sample.

Model Specification:

For the hedonic regressions, we estimate models of the log-linear form.

i i i i

ln p = g ' x + b 't + e ,

i indexes observations, ip is the price of observation i, and i ix and t are the vectors of characteristics and

period dummy variables associated with observation i. Finally, ie is taken to be the effect of

unobservables on log price, which are assumed to be independent of i ix and t . This model was estimated

separately for the thirteen categories of audio commodities defined by the NPD data, with the vector of

attributes specific to each category. We model the characteristics that are continuous or near continuous

nonlinearly by allowing them to have quadratic and sometimes cubic effects on log price. Categorical

characteristics are modeled using dummy variables.

While the characteristics variables include many of the important attributes of a given product,

there are additional attributes that are unobserved but may also affect a consumer's valuation of the

product. For instance, while we can control for whether or not a portable CD player has a memory buffer,

we have no information concerning the player's size and weight. It is possible that newer models may

have more valuable unobserved features. We attempt to control for these by including a variable for the

vintage of a given model. The vintage variable is calculated as the difference in years between March

1999, and the year and month that the model first appeared in NPD's survey. Hence, the lower the
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vintage the newer the product. To the extent that newer models have unobserved but valuable features,

inclusion of the vintage variable in the vector of characteristics ix will help to control for these quality

changes.

While it is conjectured that vintage helps to control for unobserved characteristics, there is also

the possibility that it is picking up some of the price change that would otherwise be subsumed by the

time period dummy variables. If manufacturers and/or retailers use the introduction of a new model to

adjust their pricing on a given set of characteristics, then it is likely that the coefficient on vintage will

reflect some of those price changes. Thus, it could be debated whether or not the vintage should be

included in the hedonic regressions. To examine its effect on the model, the regression is estimated with

and without this dubious variable and the results compared.

To use these empirical results to quality adjust the simulated CPI, we first observe those cases

where a substitution has been made in the CPI sample. Where one product model has replaced another in

the CPI sample, we add to the old product’s price a value equal to the coefficients on those quality

attributes which differ between the two. Thus, if the old product was an Aiwa with the same measured

physical attributes as the new Sony which replaces it, we add to the old product’s price the difference in

coefficient values between Sony and Aiwa brands.

The interpretation of the coefficients on the period dummy variables is often described somewhat

vaguely as a hedonic price index. They therefore provide direct hedonic price indices from the NPD data,

which can be compared to the results of quality adjusting the (simulated) CPI for these goods. There are,

obviously, differences in the two samples that would cause the results from the two approaches to differ.

In the NPD, the data are from independent samples in multiple periods, rather than the CPI approach of

tracking price changes for an individual product on a specific outlet shelf. Not every product is priced in

every period in the NPD, and regression-based methods where a coefficient on the time period dummy

variable is being calculated do not require that the same good be observed in the periods being compared.

Therefore, regression or hedonic indices differ from standard price indices not only in the fact that they

can control for quality changes in goods over time, but also in the fact that it is not necessary to exclude

goods from the calculation that appear only in the first or last period. To construct an hedonic index with

similar sample characteristics as the CPI, we estimate the hedonic regressions also on a subset of the NPD

data, the subset consisting of those product models present in all time periods under study. These are

“restricted sample” models. Unfortunately, while it would have been interesting to compare direct

hedonic index results from regressions on both the NPD and CPI samples, the CPI sample sizes proved

too small for this empirical procedure.

We also estimate hedonic indices using both unweighted least-squares and weighted leastsquares. For the weighted case, we use a good's average expenditure share over all periods for which we
14

observe sales as the weight for that good in every period that it appears in the data. The hedonic indices

calculated using this weighting scheme are meant to be comparable to the Tornqvist, which is the

geometric mean of price relatives with average expenditure shares as weights.

Analysis and Results:

Tables 1-6 contain the results from the hedonic regressions for table CD players, portable CD

players, main stereo speakers, surround speakers, 2 receivers, and shelf systems. Aside from the

characteristics variables listed on the tables, the regressions also include dummy variables for

manufacturer. Since this is an extensive list, the coefficients on these brand name dummy variables are

included in a separate table in the Appendix (Table A.1). As is described in the previous section, the

regressions are estimated using unweighted and weighted least-squares methods, and also with the vintage

variable included and excluded. The time dummy variables are bimonthly because the earlier installments

of the NPD data were provided on this basis.

These model specifications restrict the coefficients on the characteristics variables to be time

invariant. To test the acceptability of this hypothesis, we also estimated these models for the unrestricted

case where all of the characteristics were allowed to have a different effect in each time period. We tested

the validity of the assumed restriction,3 and found that, with a single exception, the hypothesis could not

be rejected. The single exception occurs in the weighted least-squares regressions for shelf systems, the

category which seems to be expanding most rapidly in sales volume among the audio products. If the

coefficients on characteristics are allowed to change over time, then the coefficients on the time dummy

variables only reflect the inflationary price effects on models with the reference characteristics and the

interpretation of hedonic-based indices would be suspect. Thus the acceptance of time-invariance,

generally, is reassuring for our study.

In most cases the coefficient estimates reported in Tables 1-6 have the expected sign. There are a

few notable exceptions, however. For instance, in the case of receivers, the presence of a Dolby prologic

decoder has a statistically significant negative effect on price, compared to the reference of no surround

sound decoder, in the unweighted regressions. This superficially unexpected result may follow from the

observation that some very high-end low-sales-volume models do not have surround sound decoders,

while most mid-level higher sales-volume models do. In the unweighted regression these high-end

 

2

 NPD reports main stereo speakers and surround speakers in the same category. We split the category because

many of the characteristics applied only to surround speakers and, hence, it did not seem appropriate to estimate

these two types of speakers in the same regression.

3

 The results from these regressions are not reported in the paper.
15

receivers have a larger impact on the overall coefficient estimates. This may thus represent an example of

characteristics bundling, where particular attributes are found only on products with other specific

attributes. The prologic decoder may be providing a proxy for middle-range quality products.

The coefficient estimates from these NPD regressions were then applied to make quantitative

quality adjustments to those cases in the CPI sample where one product was substituted for another.

Because the CPI is a Laspeyres index, and because vintage information is unavailable for CPI sample

items, the unweighted, vintage-excluded regression model was used to supply the coefficient values. To

arrive at the quality adjustment factor, the differences in the exponentiated values of the coefficients for

the relevant dummy variables were added to the differences in the coefficient values for continuous

variables. For example, consider the case where the discontinued product is a Pioneer 100-watt-perchannel receiver, with an observed price of $179.99 in its last period of inclusion in the CPI. Its chosen

replacement in the CPI sample was a Sony 500-watts-per-channel receiver, so that the quality-adjusted

price is $214.57. The reliability of the procedure depends on the degree to which the most relevant

attributes are captured empirically by the regressions and can also be identified for the products in the CPI

sample. In most cases, however, the price predicted by the regression model was a very reasonable

estimate of the observed price of the actual new product on its inaugural period in the CPI sample

(sometimes within a dollar or two). The only variable which could not be used explicitly in the quality

adjustment assessments was vintage, but, for those few cases where the CPI model number matched the

NPD model number (so we could be sure they were identical products) we found that the vintage of the

model chosen by the CPI staff as a substitute was very close to that of its disappearing counterpart. Thus,

although perhaps not consciously, the CPI field representatives are selecting substitutes of similar

physical character by selecting those of a similar vintage.

The results of the quality adjustment are provided in Table 7. The first column reports the

replicated CPI for audio components as a combined category, as simulated by an algorithm developed by

the BLS to replicate the published CPI as closely as possible. Its month-to-month changes are also

reported, in the second column. The third column provides the replicated CPI with the regression-derived

hedonic quality adjustments included, and its corresponding month-to-month changes. Interestingly, the

quality adjusted index values do not decrease as rapidly as the unadjusted ones. A similar pattern was

found by Liegey and Shepler (1999) for videocassette recorders (VCRs) in the CPI. This is a small

sample, with relatively few substitutions occurring, and the statistical significance of the index values is

unknown. However, as for VCRs but unlike cars and computers, there is no model-year turnover pattern

to audio products marketing. Innovations do not rapidly supplant existing models, obsolescence is seldom

a factor (at least for the time period of our study. Also, the products chosen as substitutes are of similar

vintage to the disappearing ones, not the newest models on the market, so that the average vintage of the
16

CPI sample is probably older than that of the current market as represented by the NPD data. Thus,

quality adjusting the audio products component of the CPI would not be expected to result in a more

rapidly decreasing index.

As a benchmark for comparison, indices for the NPD-defined product categories were calculated

from the NPD data itself. These are reported in Table 8. The first five rows of the table provide the

standard indices for the bimonthly periods from February/March 1997 to December1999/January 2000.

These are calculated by matching average price observations over time for the NPD models. As required

by the index formulas, we only include models in the calculation for which prices are reported in the

reference and comparison periods. Since we wish to compare these indices also to the hedonic indices

from the regressions, we have dropped observations from the NPD sample with incomplete characteristics

information. Because we have several time periods available for analysis, we calculated not only the

Laspeyres index, but also the Paasche, Fisher, geometric mean, and Tornqvist formulas. These are all

reported in the first set of rows of the table. By mathematical necessity, the geometric mean values are

uniformly less than the Laspeyres, and, as expected, the Fisher falls between the Laspeyres and the

Paasche index values. Unexpectedly, however, the Laspeyres index is below the corresponding Paasche

index for all but one category of products. When price changes result only from changes in the supply

side of the market one would expect the substitution effects to result in the Laspeyres being lower than the

Paasche. That is not likely occurring in these data, but all of these categories do show a substantial price

decrease over a relatively short period. The Laspeyres indices for portable CD players, receivers, and

shelf systems indicate a decrease in price of more than forty percent.

The next four rows of Table 8 report ordinary least-squares regression-based indices for different

samples and with the vintage variable included and excluded. The index value is calculated as the

exponentiated value of the estimated coefficient on the dummy variable for the final period, times 100.

The hedonic indices are calculated from the results presented in Tables 1-6. In the restricted sample

regression index, the coefficient on the final time period dummy variable was estimated with no other

covariates and the same set of prices that were used in the calculation of the standard indices. Therefore,

the restricted sample regression includes no prices from periods other than the first and last or from

models without a price in either the first or last periods. Hence, any difference between the restricted

sample regression indices and the standard indices is solely a result of the fact that the formula for the

regression-based index differs from that of the standard indices.4

As with the standard price indices, the restricted sample only considers the price effects of models

in existence in the first and last periods; new models are considered noncomparable to any models

 

4

 The unweighted restricted sample regression index is mathematically identical to an unweighted geometric mean

index. This fact can be easily verified using Equation (1).
17

dropping out of the sample. Therefore, these indices will miss changes in price associated with the

introduction of a new model. For instance, a new higher quality model might be introduced at a similar

price as an older model and, hence, should be registered as a (quality-adjusted) price decrease. On the

other hand, the introduction of a new model might be considered an opportunity to raise prices and hence,

represents a pure price increase. In Table 8, the regression index calculates a price index from the

coefficient on the final period time dummy estimated without any characteristics covariates but on the

same sample from which the hedonic indices are estimated. The regression index also includes indicator

variables for the other periods. Hence, any difference between the restricted sample regression index and

the regression index is due to the fact that new models are included under the implicit assumption that

they are of the same quality as discontinued models. For the unweighted case, for all categories, the (full

sample) regression index is higher than the restricted sample regression index. We interpret this result as

implying that new models, not accounted for in the restricted sample indices, are entering the market at

prices higher than discontinued or extant older models.

The hedonic indices are estimated on the same sample as the standard indices. However, the

hedonic regressions include the characteristics covariates, and thus are net of the value of quality changes.

In the unweighted case, when vintage is excluded, the hedonic index values are higher than the standard

index values. Hence, new models appear to be entering the market with more highly valued

characteristics. The hedonic index which includes vintage is usually lower than the corresponding

standard index. It is generally lower than the hedonic index which excludes vintage, which supports the

hypothesis that vintage provides a “catch-all” variable for those quality improvements which are not

elsewhere specified in the regression. It does, however, appear that new higher quality models are

entering the market at higher quality adjusted prices. In general, these comparisons among indices

derived from the NPD sample alone corroborate the results found for the CPI replication in Table 7,

indicating that there is not an anomaly inherent in the CPI sample.

 Even when vintage is included in the hedonic regression the hedonic indices remain generally

above the standard regression index values. The relationships between the various types of regressionbased indices described above for the unweighted case also hold for the weighted least-squares estimates.

However, in general the weighted estimates show a smaller price decline than the unweighted estimates.

Note that, as expected, the restricted sample regression indices are relatively close to the Tornqvist

indices.

In Table 9 the direct hedonic indices are compared to the quality-adjusted CPI values for the

period 1998 through January 2000. The hedonic index with vintage excluded is derived from the same

regressions that supplied the coefficient values to adjust the CPI, and it is reassuring that the two series

are similar. In the last bimonthly period of this comparison, the quality adjusted CPI appears to decrease
18

less quickly than its direct hedonic counterparts, although the statistical significance of these differences

is unknown.

Contrary to a priori expectations, these empirical results indicate that hedonic quality adjustment

may produce higher index values as compared to the case where all new goods are treated as

noncomparable. This result seems to be consistent with the conjecture that the introduction of new

models is used as an opportunity to raise price. When new models are treated as noncomparable, this

price increase remains unaccounted for in the index calculation. Given empirical studies on computers

(Stavins (1997)) and television sets in the U.K. (Silver (1998)) and others (Parker (1992)), this model

changeover price increase does appear to be a marketing strategy in practice. Not only can producers

“piggyback” a pure price increase on new models, it is also possible that the subset of consumers which

are most likely to purchase these new models (the “innovators” (Parker (1992)) are less price-sensitive

than other consumers and are willing to pay a premium for the new product because it is new.

Consumer audio products do not appear to be unique in this phenomenon. The first results from

hedonic models for refrigerators, and some earlier studies of VCRs using published list prices from

Consumer Reports showed that hedonic quality adjustment could result in a higher index value than its

unadjusted counterpart. Among the results to date, hedonic quality adjustment resulted in a 6.5% decline

in the index value over a 12-month period for personal computers, a 0.1% decline for a 12-month period

for televisions as well as VCRs (Liegey (1999)), and a 0.2% decline for microwave ovens for an 8-month

period (Shepler, unpublished draft). All of these studies use expanded samples of CPI data and followed

the same methods of using the hedonic coefficients to make adjustments whenever a noncomparable

substitution was made in the actual CPI database for a disappeared item. The authors of these studies also

noted that the policy of substituting the next most similar item for a disappeared one amounts to

substituting the next most close-to-obsolete item, keeping the CPI sample of older vintage than the

current market purchase patterns.

IV. Conclusions and Future Research Agenda

Hedonic analysis has long been recommended as a preferred method of quality adjustment of the

CPI. For several CPI goods categories, an hedonic approach has been adopted in late 1999 and early

2000, with additional categories of goods and services being evaluated for inclusion in 2000. This is in

advance of the next major revision of the CPI in 2002. This paper presents the preliminary results of

employing average price and quantity data from a private source to this end for consumer audio

electronics products. We have used the hedonic regression coefficients from these data to supply

quantitative estimates of quality differences for those situations when substitutions were made in the CPI
19

sample. Also, we have compared the resulting index values to direct hedonic indices calculated from the

time dummy variables in the hedonic regressions.

Analysis of these results suggests several interesting empirical issues worthy of further

investigation. The quality adjusted indices indicate price decreases over the time period under study, but

less so than their unadjusted counterparts. The differences are small, however, so it would be useful to

continue empirical investigation, especially during periods where physical changes to audio products are

rapid and pronounced. The regression specification with respect to characteristics variables appears to be

stable and consistent over time. Interestingly, among the direct hedonic formulas compared, we observed

that for all but one product category, the Laspeyres index value is below that of the Paasche index.

Altogether, these results support the proposition that new products may be entering the sample at higher

quality adjusted prices than those of extant models, an issue that bears further investigation.

Future research will continue to focus on issues of regression specification. Recognizing that the

theoretical premise of the hedonic hypothesis is a comparative static model, it is advisable to examine the

behavior of characteristics implicit prices in the dynamic market context. The importance of currently

unobserved quality attributes in the hedonic model merits more research, especially given that the vintage

variable appeared to be important to the numerical results. In addition, alternative approaches to the

problem, using discrete choice models as the theoretical basis of analysis may provide promise for

empirical application, especially when new goods appear in the market (Berry and Pakes (2000)).
20

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Armknecht, Paul, Brent Moulton, and Kenneth Stewart (1995) “Improvements to the Food at Home,

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Fixler, Dennis, Charles Fortuna, and Walter Lane (1999) “The Use of Hedonic Regression to Handle

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available at http://stats.bls.gov.cpihome.htm

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unpublished draft.

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Plucking a Piece of the US CPI’s ‘Low Hanging Fruit’?” Monthly Labor Review, forthcoming.

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University of Chicago Press.
23

Table 1: Table CD Players

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Intercept 5.5618

(0.1021)

** 5.6480

(0.0902)

** 5.1852

(0.1025)

** 5.6122

(0.0922)

**

Load Capacity

CD Capacity 0.0018

(0.0013)

0.0081

(0.0008)

** 0.0031

(0.0014)

* 0.0078

(0.0008)

**

CD Capacity, Squared 9.34e-6

(1.29e-5)

-4.62e-5

(7.36e-6)

** 3.62e-6

(1.34e-5)

-4.71e-5

(7.55e-6)

**

Type of Loader

Ref.: Top Loader

Drawer Disc Loader -0.2218

(0.0896)

* -0.3660

(0.0788)

** -0.2006

(0.0930)

* -0.4819

(0.0807)

**

Front Disc Loader -0.2109

(0.0845)

* -0.4043

(0.0749)

** -0.0693

(0.0872)

-0.4518

(0.0771)

**

Other Features

Remote Control 0.3021

(0.0270)

** 0.1699

(0.0181)

** 0.2788

(0.0280)

** 0.1599

(0.0186)

**

Time Period

Ref.: Feb/Mar

1997

Apr/May 1997 0.0064

(0.0516)

-0.0318

(0.0583)

0.0105

(0.0536)

-0.0278

(0.0601)

June/July 1997 -0.0504

(0.0505)

-0.0688

(0.0548)

-0.0269

(0.0525)

-0.0593

(0.0564)

Aug/Sept 1997 -0.0502

(0.0510)

-0.0639

(0.0546)

-0.0085

(0.0530)

-0.0541

(0.0561)

Oct/Nov 1997 -0.1275

(0.0517)

** -0.1180

(0.0540)

* -0.0676

(0.0537)

-0.1065

(0.0555)

Dec 1997/Jan 1998 -0.1529

(0.0520)

** -0.1424

(0.0535)

** -0.0808

(0.0539)

-0.1290

(0.0549)

*

Feb/March 1998 -0.1654

(0.0544)

** -0.1621

(0.0530)

** -0.0693

(0.0561)

-0.1388

(0.0542)

*

Apr/May 1998 -0.1779

(0.0548)

** -0.2018

(0.0526)

** -0.0666

(0.0565)

-0.1736

(0.0538)

**

June/July 1998 -0.1725

(0.0554)

** -0.2357

(0.0520)

** -0.0289

(0.0567)

-0.1940

(0.0530)

**

Aug/Sept 1998 -0.2542

(0.0564)

** -0.2832

(0.0520)

** -0.1014

(0.0576)

-0.2335

(0.0528)

**

Oct/Nov 1998 -0.2673

(0.0553)

** -0.3156

(0.0516)

** -0.1153

(0.0565)

* -0.2572

(0.0524)

**

Dec 1998/Jan 1999 -0.2609

(0.0550)

** -0.3225

(0.0513)

** -0.1081

(0.0561)

-0.2607

(0.0520)

**

Feb/March 1999 -0.2721

(0.0596)

** -0.3538

(0.0520)

** -0.0798

(0.0603)

-0.2683

(0.0524)

**

Apr/May 1999 -0.3515

(0.0586)

** -0.4508

(0.0509)

** -0.1381

(0.0587)

* -0.3304

(0.0507)

**

June/July 1999 -0.3884

(0.0589)

** -0.4991

(0.0510)

** -0.1676

(0.0586)

** -0.3738

(0.0508)

**

Aug/Sept 1999 -0.3930

(0.0598)

** -0.5101

(0.0511)

** -0.1538

(0.0590)

** -0.3721

(0.0506)

**

Oct/Nov 1999 -0.3821

(0.0581)

** -0.5232

(0.0507)

** -0.1523

(0.0573)

** -0.3924

(0.0504)

**

Dec 1999/Jan 2000 -0.4533

(0.0579)

** -0.5426

(0.0507)

** -0.2250

(0.0571)

** -0.4120

(0.0504)

**
24

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Model Vintage

Vintage -0.0674

(0.0161)

** -0.1468

(0.0115)

**

Vintage, Squared -0.0088

(0.0031)

** 0.0311

(0.0034)

**

Summary

N 2695 2695 2695 2695

R-squared 0.4252 0.5665 0.3776 0.5392

Adjusted R-squared 0.4137 0.5578 0.3656 0.5303

F-statistic 36.860** 65.113** 31.447** 60.640**

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
25

Table 2: Portable CD Players

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Intercept 4.6907

(0.0293)

** 4.2720

(0.0288)

** 4.3668

(0.0286)

** 4.1538

(0.0293)

**

Configuration

Ref.: CD Player

Only

Radio 0.1470

(0.0363)

** 0.2800

(0.0318)

** 0.2092

(0.0384)

** 0.3138

(0.0329)

**

Radio and Cassette 0.3167

(0.0148)

** 0.4087

(0.0126)

** 0.3184

(0.0157)

** 0.4096

(0.0130)

**

Load Capacity

CD Capacity 0.0868

(0.0169)

** 0.2197

(0.0161)

** 0.0522

(0.0178)

** 0.1769

(0.0165)

**

CD Capacity,

Squared

-0.0047

(0.0020)

* -0.0171

(0.0017)

** -0.0023

(0.0021)

-0.0139

(0.0018)

**

CD Capacity,

Cubed

3.92e-5

(1.86e-5)

* 1.52e-4

(1.59e-5)

** 1.84e-5

(1.97e-5)

1.23e-4

(1.63e-5)

**

Type of Loader

Ref.: Top Loader

Drawer Disc

Loader

0.1771

(0.0201)

** 0.1162

(0.0202)

** 0.1686

(0.0213)

** 0.1014

(0.0208)

**

Front Disc Loader 0.1632

(0.0316)

** 0.1699

(0.0260)

** 0.2401

(0.0333)

** 0.2322

(0.0267)

**

Other Features

Remote Control 0.2600

(0.0107)

** 0.2331

(0.0087)

** 0.3004

(0.0113)

** 0.2508

(0.0089)

**

Buffer Memory 0.2936

(0.0151)

** 0.4762

(0.0141)

** 0.3611

(0.0158)

** 0.5002

(0.0146)

**

Car Kit -0.0064

(0.0139)

0.0154

(0.0116)

-0.0354

(0.0147)

* 0.0033

(0.0120)

Time Period

Ref.: Feb/Mar 1997

Apr/May 1997 0.0344

(0.0240)

-0.0747

(0.0289)

** 0.0449

(0.0254)

-0.0700

(0.0299)

*

June/July 1997 -0.0395

(0.0237)

-0.0894

(0.0282)

** -0.0159

(0.0251)

-0.0794

(0.0292)

**

Aug/Sept 1997 -0.1321

(0.0235)

** -0.1390

(0.0278)

** -0.1040

(0.0249)

** -0.1258

(0.0288)

**

Oct/Nov 1997 -0.1891

(0.0240)

** -0.1844

(0.0278)

** -0.1472

(0.0254)

** -0.1685

(0.0287)

**

Dec 1997/Jan 1998 -0.2341

(0.0240)

** -0.2014

(0.0275)

** -0.1866

(0.0254)

** -0.1810

(0.0284)

**

Feb/March 1998 -0.2868

(0.0249)

** -0.2699

(0.0270)

** -0.2215

(0.0262)

** -0.2382

(0.0279)

**

Apr/May 1998 -0.3548

(0.0249)

** -0.3095

(0.0262)

** -0.2590

(0.0261)

** -0.2550

(0.0269)

**

June/July 1998 -0.4077

(0.0249)

** -0.3433

(0.0258)

** -0.2922

(0.0259)

** -0.2790

(0.0265)

**

Aug/Sept 1998 -0.4269

(0.0253)

** -0.3688

(0.0257)

** -0.2958

(0.0263)

** -0.3017

(0.0264)

**

Oct/Nov 1998 -0.5215

(0.0253)

** -0.4285

(0.0257)

** -0.3864

(0.0262)

** -0.3605

(0.0263)

**

Dec 1998/Jan 1999 -0.4980

(0.0253)

** -0.4261

(0.0257)

** -0.3641

(0.0263)

** -0.3563

(0.0263)

**

Feb/March 1999 -0.5160

(0.0267)

** -0.5131

(0.0256)

** -0.3391

(0.0275)

** -0.4098

(0.0261)

**
26

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Apr/May 1999 -0.5762

(0.0273)

** -0.5727

(0.0254)

** -0.3532

(0.0277)

** -0.4499

(0.0256)

**

June/July 1999 -0.7068

(0.0276)

** -0.6590

(0.0253)

** -0.4561

(0.0278)

** -0.5245

(0.0254)

**

Aug/Sept 1999 -0.6793

(0.0278)

** -0.6304

(0.0253)

** -0.4152

(0.0278)

** -0.4875

(0.0252)

**

Oct/Nov 1999 -0.6923

(0.0277)

** -0.6520

(0.0253)

** -0.4129

(0.0274)

** -0.5057

(0.0252)

**

Dec 1999/Jan 2000 -0.7311

(0.0276)

** -0.6537

(0.0252)

** -0.4499

(0.0273)

** -0.5076

(0.0252)

**

Model Vintage

Vintage -0.1565

(0.0075)

** -0.0992

(0.0061)

**

Vintage, Squared 0.0139

(0.0015)

** 0.0088

(0.0020)

**

Summary

N 6709 6709 6709 6709

R-squared 0.5015 0.5695 0.4403 0.5390

Adjusted R-squared 0.4974 0.5660 0.4359 0.5354

F-statistic 123.960** 162.985** 100.682** 149.683**

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
27

Table 3: Main Stereo Speakers

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Intercept 4.7642

(0.0611)

** 4.7353

(0.0641)

** 4.5468

(0.0583)

** 4.5991

(0.0638)

**

Configuration

Ref.: Single Speaker

Pair Configuration 0.2140

(0.0220)

** 0.1734

(0.0217)

** 0.2063

(0.0223)

** 0.1529

(0.0221)

**

Power

Ref.: Not Powered

Powered 0.4613

(0.0323)

** 0.2064

(0.0276)

** 0.4958

(0.0326)

** 0.2495

(0.0280)

**

Speaker Design

Ref.: Onwall

Speaker

Shelf Speaker -0.4934

(0.0332)

** -0.6426

(0.0341)

** -0.4823

(0.0223)

** -0.6389

(0.0346)

**

Floor Speaker -0.2138

(0.0384)

** -0.3875

(0.0375)

** -0.2191

(0.0390)

** -0.4111

(0.0381)

**

Inwall Speaker -0.3297

(0.0352)

** -0.4562

(0.0376)

** -0.3249

(0.0357)

** -0.4442

(0.0383)

**

Other Speaker

Design

-0.2740

(0.1059)

** -0.4520

(0.0932)

** -0.3046

(0.1074)

** -0.4858

(0.0949)

**

Speaker Crossover

Main Speaker

Crossover

-0.3749

(0.0906)

** -0.6303

(0.1790)

** -0.3774

(0.0919)

** -0.6180

(0.1824)

**

Woofer Size

Ref.: Less than 2 In.

4-8 Inch Woofer

Size

-0.1350

(0.0396)

** -0.0861

(0.0386)

* -0.1055

(0.0401)

** -0.0630

(0.0393)

8-12 Inch Woofer

Size

0.0555

(0.0435)

0.0873

(0.0419)

* 0.0885

(0.0441)

* 0.1088

(0.0427)

*

Over 12 Inch

Woofer Size

0.2013

(0.0505)

** 0.2926

(0.0492)

** 0.2332

(0.0512)

** 0.2929

(0.0502)

**

Main Speaker

Drivers

Ref.: One Driver

Two Drivers 0.6107

(0.0857)

** 0.7524

(0.1767)

** 0.6178

(0.0869)

** 0.7648

(0.1801)

**

Three Drivers 0.9019

(0.0876)

** 1.0634

(0.1774)

** 0.9116

(0.0889)

** 1.1028

(0.1808)

**

Four Drivers 1.2088

(0.0912)

** 1.4647

(0.1787)

** 1.2247

(0.0926)

** 1.4922

(0.1822)

**

Five Drivers 1.1358

(0.1036)

** 1.4281

(0.1829)

** 1.1448

(0.1051)

** 1.4337

(0.1864)

**

Six Drivers 1.6744

(0.1252)

** 2.0026

(0.1997)

** 1.6500

(0.1271)

** 1.9711

(0.2036)

**

Seven Drivers 1.6938

(0.1076)

** 2.0301

(0.1847)

** 1.6721

(0.1092)

** 2.0156

(0.1883)

**

Other Features

Magnetic

Shielding

0.1485

(0.0177)

** 0.2043

(0.0170)

** 0.1937

(0.0175)

** 0.2679

(0.0167)

**

Weather Proofing 0.0297

(0.0288)

0.1596

(0.0254)

** 0.0354

(0.0291)

0.1367

(0.0255)

**

Mounting

Accessories

-0.1234

(0.0257)

** -0.2793

(0.0263)

** -0.1293

(0.0260)

** -0.2734

(0.0268)

**
28

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Wireless 0.3293

(0.1191)

** 0.5251

(0.0928)

** 0.3477

(0.1209)

** 0.4853

(0.0945)

**

Time Period

Ref.: Feb/Mar 1997

Apr/May 1997 -0.0257

(0.0346)

-0.0132

(0.0349)

-0.0231

(0.0351)

-0.0116

(0.0356)

June/July 1997 -0.0444

(0.0347)

-0.0321

(0.0348)

-0.0393

(0.0352)

-0.0295

(0.0355)

Aug/Sept 1997 -0.0493

(0.0346)

-0.0338

(0.0348)

-0.0402

(0.0351)

-0.0300

(0.0355)

Oct/Nov 1997 -0.0594

(0.0348)

-0.0352

(0.0338)

-0.0419

(0.0353)

-0.0241

(0.0344)

Dec 1997/Jan 1998 -0.0915

(0.0347)

** -0.0535

(0.0337)

-0.0737

(0.0352)

* -0.0459

(0.0342)

Feb/March 1998 -0.1022

(0.0355)

** -0.0624

(0.0333)

-0.0749

(0.0359)

* -0.0486

(0.0338)

Apr/May 1998 -0.0807

(0.0355)

* -0.0556

(0.0331)

-0.0538

(0.0360)

-0.0403

(0.0336)

June/July 1998 -0.1045

(0.0357)

** -0.0821

(0.0331)

* -0.0750

(0.0361)

* -0.0647

(0.0336)

Aug/Sept 1998 -0.1366

(0.0359)

** -0.0876

(0.0330)

** -0.1018

(0.0364)

** -0.0616

(0.0335)

Oct/Nov 1998 -0.1583

(0.0351)

** -0.0909

(0.0325)

** -0.1096

(0.0354)

** -0.0512

(0.0329)

Dec 1998/Jan 1999 -0.1497

(0.0351)

** -0.0852

(0.0325)

** -0.0964

(0.0353)

** -0.0412

(0.0328)

Feb/March 1999 -0.1333

(0.0369)

** -0.0790

(0.0331)

* -0.0660

(0.0370)

-0.0294

(0.0334)

Apr/May 1999 -0.1397

(0.0366)

** -0.0946

(0.0330)

** -0.0702

(0.0366)

-0.0384

(0.0333)

June/July 1999 -0.1751

(0.0369)

** -0.1136

(0.0329)

** -0.0949

(0.0367)

** -0.0468

(0.0330)

Aug/Sept 1999 -0.1798

(0.0370)

** -0.1449

(0.0330)

** -0.0938

(0.0367)

* -0.0748

(0.0330)

*

Oct/Nov 1999 -0.1666

(0.0363)

** -0.1511

(0.0329)

** -0.0736

(0.0358)

* -0.0736

(0.0328)

*

Dec 1999/Jan 2000 -0.1322

(0.0360)

** -0.1647

(0.0330)

** -0.0362

(0.0354)

-0.0859

(0.0329)

**

Model Vintage

Vintage -0.0583

(0.0081)

** -0.0874

(0.0071)

Vintage, Squared 0.0010

(0.0011)

0.0071

(0.0008)

Summary

N 4890 4890 4890 4890

R-squared 0.7706 0.8254 0.7635 0.8184

Adjusted Rsquared0.7666 0.8223 0.7594 0.8152

F-statistic 189.896** 267.205** 186.950** 260.907**

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
29

Table 4: Surround Speakers

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Intercept 5.1297

(0.0869)

** 5.0156

(0.0766)

** 4.7739

(0.0868)

** 4.6962

(0.0725)

**

Configuration

Ref.: Single Speaker

Pair Configuration 0.6317

(0.1172)

** 0.4569

(0.1174)

** 0.6212

(0.1216)

** 0.4776

(0.1212)

**

Surround

Configuration

-0.2020

(0.0648)

** -0.2387

(0.0563)

** -0.1395

(0.0670)

* -0.0932

(0.0566)

Power

Ref.: Not Powered

Powered 0.5754

(0.0460)

** 0.4504

(0.0493)

** 0.6655

(0.0474)

** 0.5913

(0.0461)

**

Speaker Type

Ref.: Main Speaker

Center Speaker -0.1290

(0.0510)

* -0.1601

(0.0567)

** -0.1109

(0.0530)

* -0.0301

(0.0551)

Rear Speaker -0.7253

(0.1332)

** -0.1656

(0.1305)

-0.5717

(0.1377)

** 0.0244

(0.1339)

System Type

Ref.: Three-Piece

Four-Piece System 0.9006

(0.0842)

** 0.8885

(0.0607)

** 0.7133

(0.0864)

** 0.7067

(0.0530)

**

Five-Piece System 0.6918

(0.0882)

** 0.7145

(0.0636)

** 0.7251

(0.0914)

** 0.7677

(0.0655)

**

Six-Piece System 0.8087

(0.0657)

** 0.8592

(0.0541)

** 0.8442

(0.0681)

** 0.8502

(0.0553)

**

Other System 1.6588

(0.1366)

** 2.9352

(0.1347)

** 1.5153

(0.1414)

** 2.7582

(0.1383)

**

Surround Speaker

Ref.: Other

Shelf Speaker 0.1264

(0.0555)

* -0.1489

(0.0453)

** 0.0048

(0.0569)

-0.2191

(0.0456)

**

Inwall Speaker 1.4142

(0.1772)

** 1.5240

(0.2541)

** 1.5015

(0.1837)

** 1.6052

(0.2623)

**

Onwall Speaker 0.1766

(0.0687)

* -0.1214

(0.0703)

0.0846

(0.0708)

-0.1875

(0.0724)

**

Other Features

Magnetic Shielding 0.0408

(0.0318)

0.1093

(0.0273)

** 0.0674

(0.0330)

* 0.0906

(0.0282)

**

Mounting

Accessories

0.0094

(0.0364)

-0.1185

(0.0298)

** 0.0199

(0.0376)

-0.1199

(0.0299)

**

THX Certification 0.3481

(0.0502)

** 0.2682

(0.0552)

** 0.3889

(0.0520)

** 0.2824

(0.0570)

**

Time Period

Ref.: Feb/Mar 1997

Apr/May 1997 0.0031

(0.0455)

-0.0097

(0.0421)

0.0041

(0.0472)

-0.0078

(0.0435)

June/July 1997 -0.0874

(0.0451)

-0.0430

(0.0415)

-0.0841

(0.0468)

-0.0399

(0.0428)

Aug/Sept 1997 -0.0515

(0.0449)

-0.0478

(0.0412)

-0.0425

(0.0466)

-0.0445

(0.0425)

Oct/Nov 1997 -0.1107

(0.0451)

* -0.0897

(0.0403)

* -0.0918

(0.0468)

* -0.0763

(0.0416)

Dec 1997/Jan 1998 -0.0796

(0.0459)

-0.1025

(0.0401)

* -0.0537

(0.0476)

-0.0841

(0.0414)

*
30

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Feb/March 1998 -0.0996

(0.0479)

* -0.1237

(0.0403)

** -0.0519

(0.0496)

-0.0970

(0.0416)

*

Apr/May 1998 -0.1297

(0.0485)

** -0.1178

(0.0404)

** -0.0819

(0.0502)

-0.0908

(0.0416)

*

June/July 1998 -0.1365

(0.0491)

** -0.1356

(0.0405)

** -0.0840

(0.0508)

-0.1057

(0.0418)

*

Aug/Sept 1998 -0.1194

(0.0482)

* -0.1582

(0.0387)

** -0.0479

(0.0498)

-0.1045

(0.0398)

**

Oct/Nov 1998 -0.1891

(0.0474)

** -0.1872

(0.0380)

** -0.1020

(0.0489)

* -0.1148

(0.0389)

**

Dec 1998/Jan 1999 -0.2069

(0.0472)

** -0.2070

(0.0380)

** -0.1073

(0.0486)

* -0.1314

(0.0388)

**

Feb/March 1999 -0.2471

(0.0501)

** -0.2699

(0.0384)

** -0.1297

(0.0513)

* -0.1798

(0.0391)

**

Apr/May 1999 -0.2308

(0.0505)

** -0.2547

(0.0384)

** -0.0950

(0.0515)

-0.1564

(0.0390)

**

June/July 1999 -0.2550

(0.0511)

** -0.2629

(0.0388)

** -0.0998

(0.0517)

-0.1529

(0.0392)

**

Aug/Sept 1999 -0.2819

(0.0526)

** -0.2511

(0.0390)

** -0.1061

(0.0529)

* -0.1317

(0.0393)

**

Oct/Nov 1999 -0.3187

(0.0498)

** -0.2822

(0.0384)

** -0.1258

(0.0494)

* -0.1561

(0.0384)

**

Dec 1999/Jan 2000 -0.2538

(0.0498)

** -0.3281

(0.0380)

** -0.0531

(0.0492)

-0.2048

(0.0382)

**

Model Vintage

Vintage -0.1073

(0.0130)

** -0.1058

(0.0105)

**

Vintage, Squared -0.0008

(0.0024)

0.0074

(0.0026)

**

Summary

N 3049 3049 3049 3049

R-squared 0.7700 0.8421 0.7521 0.8315

Adjusted R-squared 0.7638 0.8379 0.7455 0.8271

F-statistic 124.228** 197.918** 115.494** 187.965**

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
31

Table 5: Receivers

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Intercept 4.7784

(0.0757)

** 4.3229

(0.0785)

** 4.2288

(0.0820)

** 3.8897

(0.0841)

**

Watts Capability

Watts per

Channel

0.0111

(0.0003)

** 0.0117

(0.0003)

** 0.0108

(0.0003)

** 0.0109

(0.0004)

**

Radio Tuner

Ref.: Analog

Tuner

Digital Tuner -0.1423

(0.0468)

** -0.0888

(0.0350)

* -0.2870

(0.0520)

** -0.1193

(0.0383)

**

Other Features

Graphic

Equalizer

-0.0332

(0.0374)

-0.0513

(0.0344)

0.0740

(0.0407)

0.1202

(0.0368)

**

Remote Control -0.0348

(0.0444)

0.1690

(0.0546)

** 0.1164

(0.0492)

* 0.3116

(0.0594)

**

Video Switching 0.4433

(0.0269)

** 0.5717

(0.0261)

** 0.5062

(0.0298)

** 0.6749

(0.0277)

**

THX

Certification

0.8526

(0.0337)

** 0.6345

(0.0319)

** 0.9042

(0.0377)

** 0.6979

(0.0348)

**

Surround Decoder

Dolby Pro Logic -0.2347

(0.0191)

** -0.4618

(0.0170)

** -0.2895

(0.0207)

** -0.5822

(0.0173)

**

Dolby Digital 0.3395

(0.0234)

** 0.0896

(0.0173)

** 0.4184

(0.0258)

** 0.0577

(0.0177)

**

Time Period

Ref.: Feb/Mar

1997

Apr/May 1997 0.1479

(0.0385)

** 0.3095

(0.0514)

** 0.2022

(0.0429)

** 0.4268

(0.0560)

**

June/July 1997 0.0867

(0.0381)

* 0.2482

(0.0500)

** 0.1723

(0.0425)

** 0.3889

(0.0544)

**

Aug/Sept 1997 0.0383

(0.0376)

0.1930

(0.0492)

** 0.1313

(0.0420)

** 0.3324

(0.0536)

**

Oct/Nov 1997 0.0150

(0.0380)

0.1787

(0.0485)

** 0.1300

(0.0424)

** 0.3392

(0.0526)

**

Dec 1997/Jan

1998

-0.0289

(0.0381)

0.1466

(0.0481)

** 0.0995

(0.0424)

* 0.3183

(0.0522)

**

Feb/March 1998 -0.0312

(0.0393)

0.1044

(0.0478)

* 0.1350

(0.0437)

** 0.2949

(0.0518)

**

Apr/May 1998 -0.1231

(0.0393)

** 0.0271

(0.0472)

0.0658

(0.0435)

0.2428

(0.0510)

**

June/July 1998 -0.1274

(0.0393)

** 0.0024

(0.0468)

0.0874

(0.0433)

* 0.2401

(0.0504)

**

Aug/Sept 1998 -0.2318

(0.0395)

** -0.0660

(0.0465)

-0.0005

(0.0434)

0.1793

(0.0499)

**

Oct/Nov 1998 -0.2437

(0.0390)

** -0.0911

(0.0457)

* 0.0064

(0.0427)

0.1825

(0.0488)

**

Dec 1998/Jan

1999

-0.2706

(0.0391)

** -0.1121

(0.0455)

* -0.0070

(0.0428)

0.1771

(0.0484)

**

Feb/March 1999 -0.3666

(0.0408)

** -0.1826

(0.0456)

** -0.0530

(0.0443)

0.1417

(0.0482)

**

Apr/May 1999 -0.4163

(0.0412)

** -0.2667

(0.0452)

** -0.0510

(0.0441)

0.0813

(0.0474)

**

June/July 1999 -0.4793** -0.3388** -0.0681 0.0434
32

Vintage Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

(0.0416) (0.0450) (0.0439) (0.0466)

Aug/Sept 1999 -0.4871

(0.0412)

** -0.3557

(0.0448)

** -0.0664

(0.0433)

0.0399

(0.0462)

Oct/Nov 1999 -0.4886

(0.0403)

** -0.3557

(0.0446)

** -0.0614

(0.0421)

0.0390

(0.0460)

Dec 1999/Jan

2000

-0.5511

(0.0404)

** -0.4061

(0.0447)

** -0.1224

(0.0422)

** -0.0115

(0.0461)

Model Vintage

Vintage -0.2138

(0.0110)

** -0.1801

(0.0101)

**

Vintage, Squared 0.0144

(0.0024)

** 0.0063

(0.0035)

Summary

N 3781 3781 3781 3781

R-squared 0.7381 0.7902 0.6710 0.7484

Adjusted Rsquared0.7346 0.7874 0.6668 0.7452

F-statistic 210.267** 281.008** 158.582** 231.311**

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
33

Table 6: Shelf Systems

Vintage

Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage

Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

Intercept 5.9341

(0.0820)

** 6.1965

(0.0777)

** 5.4880

(0.0927)

** 6.1535

(0.0873)

**

Product Type

Ref.: Micro, OnePiece

Midi, One Piece -0.8355

(0.1725)

** -0.9031

(0.1409)

** -1.2507

(0.1991)

** -1.4061

(0.1531)

**

Midi, With Cassette -0.4559

(0.0596)

** -0.6131

(0.0513)

** -0.6204

(0.0683)

** -0.7285

(0.0577)

**

Midi, Two Pieces -0.4387

(0.0851)

** -0.6419

(0.0874)

** -0.6956

(0.0975)

** -0.6455

(0.0990)

**

Mini, One Piece -0.4217

(0.0698)

** -0.4665

(0.0542)

** -0.4551

(0.0808)

** -0.5074

(0.0614)

**

Mini, With Cassette -0.5814

(0.0495)

** -0.7238

(0.0413)

** -0.6976

(0.0567)

** -0.7817

(0.0467)

**

Mini, Two Pieces -0.3307

(0.0552)

** -0.4089

(0.0609)

** -0.6339

(0.0622)

** -0.6795

(0.0663)

**

Mini, Three Pieces -0.6677

(0.1038)

** -0.7778

(0.0695)

** -0.8490

(0.1198)

** -0.7543

(0.0788)

**

Micro, With Cassette -0.5111

(0.0519)

** -0.4262

(0.0414)

** -0.5612

(0.0591)

** -0.4286

(0.0468)

**

Micro, Two Pieces -0.0259

(0.0794)

0.0361

(0.0692)

-0.0100

(0.0919)

0.0208

(0.0784)

Micro, Separate Amp. 0.6255

(0.1064)

** 0.6393

(0.1234)

** 0.2134

(0.1216)

0.3307

(0.1390)

*

Watts Capability

Watts per Channel 0.0002

(0.0002)

0.0009

(0.0002)

** 0.0009

(0.0002)

** 0.0013

(0.0002)

**

Subwoofer System

Subwoofer System 0.1152

(0.0361)

** 0.0122

(0.0254)

0.2058

(0.0413)

** 0.0117

(0.0286)

Cassette Deck

Ref.: Single Cassette

Double Cassette -0.2186

(0.0362)

** -0.0642

(0.0281)

* -0.3559

(0.0414)

** -0.1577

(0.0305)

**

Capacity

CD Capacity 0.0221

(0.0037)

** 0.0253

(0.0048)

** 0.0159

(0.0043)

** 0.0301

(0.0055)

**

CD Capacity,

Squared

-0.0003

(0.0001)

** -0.0005

(0.0001)

** -0.0002

(0.0001)

** -0.0005

(0.0001)

**

 Features

Digital Signal

Processing

0.1843

(0.0372)

** -0.0172

(0.0233)

0.1810

(0.0425)

** -0.0654

(0.0262)

*

Remote Control 0.0427

(0.0493)

-0.0346

(0.0533)

0.1859

(0.0564)

** -0.0390

(0.0600)

Surround Sound 0.0832

(0.0269)

** 0.0620

(0.0191)

** 0.2271

(0.0303)

** 0.0585

(0.0214)

**

Woofer Size 0.0791

(0.0106)

** 0.0372

(0.0089)

** 0.0686

(0.0123)

** 0.0029

(0.0099)

Dolby Surround

Sound

0.1841

(0.0324)

** 0.2206

(0.0238)

** 0.1604

(0.0375)

** 0.2179

(0.0270)

**

Speakers

Ref.: 4-Way Speakers

2-Way Speakers 0.2352** 0.2138** 0.2448** 0.2935**
34

Vintage

Included

Unweighted

Vintage Included

Weight: Average

Expenditure Share

Vintage

Excluded

Unweighted

Vintage Excluded

Weight: Average

Expenditure Share

(0.0329) (0.0293) (0.0377) (0.0324)

3-Way Speakers 0.3232

(0.0371)

** 0.4752

(0.0365)

** 0.3303

(0.0421)

** 0.6120

(0.0396)

**

4-Way Speakers 0.3304

(0.0636)

** 0.7348

(0.0542)

** 0.4173

(0.0734)

** 0.8737

(0.0601)

**

Time Period

Ref.: Feb/Mar 1997

Apr/May 1997 -0.0015

(0.0414)

-0.0292

(0.0431)

0.0106

(0.0480)

-0.0179

(0.0489)

June/July 1997 -0.0340

(0.0416)

-0.0866

(0.0411)

* 0.0085

(0.0482)

-0.0432

(0.0466)

Aug/Sept 1997 -0.0717

(0.0414)

-0.1147

(0.0415)

** -0.0127

(0.0479)

-0.0603

(0.0470)

Oct/Nov 1997 -0.1784

(0.0432)

** -0.1830

(0.0451)

** -0.0985

(0.0499)

* -0.1282

(0.0510)

*

Dec 1997/Jan 1998 -0.1484

(0.0431)

** -0.2028

(0.0442)

** -0.0594

(0.0498)

-0.1347

(0.0500)

**

Feb/March 1998 -0.1156

(0.0466)

* -0.2285

(0.0445)

** 0.0216

(0.0536)

-0.1383

(0.0502)

**

Apr/May 1998 -0.2415

(0.0461)

** -0.2730

(0.0436)

** -0.0761

(0.0528)

-0.1740

(0.0492)

**

June/July 1998 -0.2848

(0.0464)

** -0.3764

(0.0419)

** -0.0714

(0.0528)

-0.2335

(0.0469)

**

Aug/Sept 1998 -0.3348

(0.0469)

** -0.3677

(0.0415)

** -0.0921

(0.0531)

-0.2168

(0.0464)

**

Oct/Nov 1998 -0.3818

(0.0460)

** -0.4137

(0.0413)

** -0.1221

(0.0519)

* -0.2652

(0.0462)

**

Dec 1998/Jan 1999 -0.4043

(0.0462)

** -0.4236

(0.0412)

** -0.1326

(0.0520)

* -0.2748

(0.0461)

**

Feb/March1999 -0.5352

(0.0495)

** -0.5912

(0.0408)

** -0.2151

(0.0553)

** -0.4005

(0.0452)

**

Apr/May 1999 -0.5680

(0.0501)

** -0.6365

(0.0407)

** -0.2267

(0.0557)

** -0.4305

(0.0449)

**

June/July 1999 -0.6797

(0.0526)

** -0.7271

(0.0410)

** -0.3008

(0.0582)

** -0.5075

(0.0450)

**

Aug/Sept 1999 -0.7338

(0.0519)

** -0.7104

(0.0409)

** -0.3190

(0.0566)

** -0.4822

(0.0447)

**

Oct/Nov 1999 -0.7748

(0.0534)

** -0.7449

(0.0412)

** -0.3178

(0.0573)

** -0.4967

(0.0449)

**

Dec 1999/Jan 2000 -0.7769

(0.0504)

** -0.7683

(0.0410)

** -0.3599

(0.0544)

** -0.5299

(0.0447)

**

 Model Vintage

Vintage -0.2295

(0.0165)

** -0.1780

(0.0117)

**

Vintage, Squared 0.0108

(0.0033)

** 0.0024

(0.0039)

Summary

N 1762 1762 1762 1762

R-squared 0.7693 0.9012 0.6892 0.8729

Adjusted R-squared 0.7604 0.8974 0.6777 0.8682

F-statistic 86.994** 237.955** 59.765** 185.069**

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
Table 7: CPI Quality Adjusted by NPD Regression Coefficients

Period Published Index Month-to-Month

Change

Quality Adjusted Index Month-to-Month

Change

Number of Quality

Adjusted Quotes

Number of Price

Quotes

9712 100.00 --- 100.00 --- --- ---

9801 99.47 0.99 99.52 1.00 3 158

9802 98.34 0.99 98.81 0.99 2 140

9803 98.71 1.00 97.85 0.99 5 152

9804 98.29 1.00 98.33 1.00 4 166

9805 97.26 0.99 96.89 0.99 3 187

9806 96.31 0.99 96.01 0.99 2 165

9807 95.79 1.00 95.72 1.00 4 170

9808 95.22 0.99 95.05 0.99 2 167

9809 95.53 1.00 96.36 1.01 12 186

9810 95.22 1.00 94.89 0.98 9 164

9811 93.40 0.98 93.03 0.98 4 186

9812 92.62 0.99 92.42 0.99 2 171

9901 96.47 1.04 96.32 1.04 4 183

9902 95.47 0.99 95.50 0.99 4 162

9903 95.38 1.00 95.93 1.00 3 207

9904 94.82 0.99 95.54 1.00 7 167

9905 93.50 0.99 94.51 0.99 7 205

9906 92.50 0.99 92.31 0.98 4 172

9907 92.08 1.00 92.19 1.00 7 183

9908 91.38 0.99 91.43 0.99 8 153

9909 89.74 0.98 91.06 1.00 6 218

9910 89.35 1.00 89.25 0.98 3 216

9911 89.54 1.00 89.19 1.00 4 225

9912 88.99 0.99 89.16 1.00 0 190

0001 89.26 1.00 89.15 1.00 3 265
36

Table 8

February/March 1997=100

Direct Hedonic Price Indices: February/March 1997 to December 1999/January 2000

Table

CD

Players

Portable

CD

Players

Main

Stereo

Speakers

Surround

Speakers

Receivers Shelf

Systems

Standard Indices

Laspeyres 57.54 57.52 86.39 66.20 58.78 40.20

Paasche 94.73 41.48 96.89 89.50 84.43 37.15

Geometric Mean 53.23 51.83 83.17 61.21 54.30 37.63

Fisher 73.83 48.85 91.49 76.98 70.45 38.65

Tornqvist 54.45 47.60 89.52 67.16 56.10 37.66

Indices

(Unweighted)

Restricted Sample Regression

Index

(No Quality Adjustment)

76.36 55.75 84.39 79.79 59.48 45.80

Full Sample Regression Index

(No Quality Adjustment)

98.79 68.91 112.48 133.61 100.57 105.44

Full Sample Hedonic Index,

Vintage Excluded

79.85 63.77 96.45 94.82 88.48 69.77

Full Sample Hedonic Index,

Vintage Included

63.55 48.14 87.62 77.58 57.63 45.98

Indices with

Average

Expenditure

Share Weights

Restricted Sample Regression

Index

(No Quality Adjustment)

67.76 52.97 89.15 69.35 59.55 41.30

Full Sample Regression Index

(No Quality Adjustment)

71.90 63.10 96.03 112.07 95.27 41.00

Full Sample Hedonic Index,

Vintage Excluded

66.23 60.19 91.77 81.48 98.86 58.87

Full Sample Hedonic Index,

Vintage Included

58.12 52.01 84.82 72.03 66.63 46.38
37

Table 9

Dec 1997/Jan 1998=100

Comparison of Quality Adjusted CPI to Direct Hedonic Indexes

Feb/March

1998

April/May

1998

June/July

1998

August/Sept

1998

Oct/Nov

1998

Dec 1998/Jan

1999

Full Sample Hedonic Index,

Unweighted, Vintage Excluded

100.75 97.53 97.41 94.67 91.83 91.75

Full Sample Hedonic Index,

Unweighted, Vintage Included

99.46 93.71 91.71 87.99 84.59 84.17

Quality Adjusted CPI 98.33 97.61 95.87 95.71 93.96 94.37

Feb/March

1999

April/May

1999

June/July

1999

August/Sept

1999

Oct/Nov

1999

Dec 1999/Jan

2000

Full Sample Hedonic Index,

Unweighted, Vintage Excluded

91.27 90.55 86.28 87.33 87.70 86.15

Full Sample Hedonic Index,

Unweighted, Vintage Included

81.20 78.48 73.02 72.93 72.65 71.52

Quality Adjusted CPI 95.71 95.02 92.25 91.25 89.22 89.15
Figure 1: Units Sold Per NPD Category (February/March 1997 - February/March 1999)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Portable CD Players

Table CD Players

Radios

Tape Recorders

Portable Radio Cassette

Headset Stereo

Receivers

Cassette Decks

Stereo Speakers

Surround Speakers

Rack Systems

Shelf Systems

Category
39

Figure 2: Relative Units Sold and Expenditures, NPD Data

0%

5%

10%

15%

20%

25%

30%

35%

Portable CD Players

Table CD Players

Radios

Tape Recorders

Portable Radio Cassette

Headset Stereo

Receivers

Cassette Decks

Stereo Speakers

Surround Speakers

Rack Systems

Shelf Systems

Category

Percentage of Total

% Units Sold

% Expenditures
40

Figure 3: Average Vintage, as of March 1999

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Portable CD Players

Table CD Players

Radios

Tape Recorders

Portable Radio Cassette

Headset Stereo

Receivers

Cassette Decks

Stereo Speakers

Surround Speakers

Rack Systems

Shelf Systems

Category

Vintage (Years)
Table A.1: Regression Coefficients for Brand Names

Unweighted Full Sample Regressions, Vintage Included

Reference Brand: SONY

Table CD

Players

Portable CD

Players

Main Stereo

Speakers

Surround

Speakers

Receivers Shelf Systems

Acoustic Research 0.7508

(0.0650)

** 0.5641

(0.1477)

**

Adcom 1.1927

(0.1489)

**

ADS 1.4482

(0.3935)

**

Advent 0.1885

(0.0541)

** -0.6076

(0.0975)

**

Aiwa 0.0469

(0.1342)

-0.1694

(0.0157)

** -0.7220

(0.1003)

** -0.2710

(0.0780)

** -0.2744

(0.0489)

**

Alaron -1.0536

(0.1453)

**

Altec -0.3787

(0.0769)

** -0.4561

(0.1924)

**

Audiovox -0.9704

(0.1624)

** 0.0914

(0.1821)

-0.2482

(0.1275)

*

B&K 1.7436

(0.1014)

**

B&W 2.0149

(0.0516)

** 1.2722

(0.0902)

**

Bang and Olufsen 0.9252

(0.4423)

** 2.2397

(0.0797)

**

BIC 0.3313

(0.0892)

** 0.0487

(0.1268)

Bose 1.0727

(0.0595)

** 0.5210

(0.0899)

** 1.5171

(0.0887)

**

Boston Acoustics 0.9309

(0.0496)

** 0.7110

(0.0818)

**

California Audio 0.8425

(0.1821)

**

Canton 1.0331

(0.2627)

**

Carver 0.6329

(0.1487)

** 1.2044

(0.1829)

**

Casio -0.3098

(0.0818)

**

Celestion 0.7307

(0.1145)

** 0.0658

(0.1808)

Cerwin Vega 0.4448

(0.0630)

** 0.2531

(0.0895)

**

Craig -0.5331

(0.0332)

**

Definitive 0.8991

(0.0620)

** 1.1715

(0.0830)

**

Denon 0.3725

(0.0498)

** 0.1276

(0.2628)

0.6034

(0.0271)

** 0.6393

(0.0685)

**

Emerson -0.4115

(0.0584)

** -0.4113

(0.2190)

*

Energy 1.3530

(0.0653)

** 0.5303

(0.1054)

**

Fisher -0.2727

(0.0621)

** -0.2010

(0.0221)

** -0.3248

(0.3931)

-1.1974

(0.3350)

** -0.4663

(0.0501)

** 0.0311

(0.0552)

General Electric -0.8763

(0.3241)

** -1.0385

(0.0912)

**

Granprix -0.4944

(0.0321)

**

Harman Kardon 0.1494

(0.0900)

* 0.7291

(0.0360)

** 0.7614

(0.1274)

**

Infinity 0.7500

(0.0476)

** 0.3495

(0.0806)

**

JBL 0.4234 ** 0.1692** 0.3919**
42

Table CD

Players

Portable CD

Players

Main Stereo

Speakers

Surround

Speakers

Receivers Shelf Systems

(0.0464) (0.0760) (0.0966)

Jensen -0.5600

(0.1074)

** -1.1529

(0.1361)

**

JVC -0.2796

(0.0406)

** -0.1040

(0.0167)

** -0.8700

(0.2309)

** -0.2842

(0.0270)

** 0.0501

(0.0330)

Kash Gold 0.2256

(0.0906)

**

KEF 1.4686

(0.0550)

** 1.2250

(0.1057)

**

Kenwood -0.2845

(0.0390)

** -0.2088

(0.0244)

** -0.0892

(0.0895)

-0.3060

(0.0918)

** -0.1896

(0.0248)

** -0.0046

(0.0477)

KLH -1.3279

(0.0766)

** -0.6245

(0.1465)

**

Klipsch 1.0142

(0.0478)

** 0.5931

(0.0788)

**

Koss -0.2621

(0.0302)

** -0.6589

(0.1041)

**

Krell 1.9713

(0.3207)

**

Lenoxx -0.5120

(0.1327)

**

M&K 2.1508

(0.0914)

** 1.3169

(0.0884)

**

Magnavox -0.6827

(0.0823)

** -0.1995

(0.0182)

** -0.9045

(0.1559)

** -0.0722

(0.2186)

-0.2463

(0.0600)

**

Marantz 0.5306

(0.0715)

** 0.7734

(0.0447)

** 0.4586

(0.1580)

**

Martin Logan 2.7095

(0.0862)

** 2.5872

(0.1247)

**

McIntosh 1.9685

(0.1519)

**

Memorex -0.5250

(0.1233)

**

Meridian 3.0683

(0.2562)

** 2.4800

(0.2044)

** 2.6593

(0.1963)

**

Mirage 1.0915

(0.0593)

** 0.8990

(0.0819)

**

Mission 0.6957

(0.0649)

** 0.2228

(0.1454)

Mitsubishi 0.1353

(0.1575)

1.1184

(0.2800)

** 0.3366

(0.1007)

** 0.4975

(0.0593)

**

MTC 0.4820

(0.4510)

MTX -0.0059

(0.0725)

-0.2111

(0.1503)

NAD 0.4435

(0.0912)

** 2.0082

(0.1713)

**

Nakamichi 1.1127

(0.1421)

** 1.3945

(0.3102)

**

Newtech -0.4925

(0.0717)

**

NHT 0.6946

(0.1311)

** 0.5715

(0.2327)

**

Niles 0.9222

(0.0649)

**

Onkyo 0.1686

(0.0521)

** -0.2892

(0.1456)

** -0.1508

(0.1937)

0.3964

(0.0279)

** 0.3867

(0.0726)

**

Panasonic -0.3134

(0.1310)

** -0.1125

(0.0151)

** 0.0709

(0.1396)

-0.0650

(0.0514)

Paradigm 1.1263

(0.0882)

** 0.9519

(0.1036)

**

Phase Tech 1.2382

(0.0999)

** 0.4816

(0.1455)

**

Philips 0.4605

(0.1823)

** -0.5106

(0.1087)

** -0.8583

(0.4411)

* -0.1772

(0.1390)
43

Table CD

Players

Portable CD

Players

Main Stereo

Speakers

Surround

Speakers

Receivers Shelf Systems

Pioneer -0.0100

(0.0325)

0.3451

(0.7183)

-0.4989

(0.0597)

** -0.4578

(0.0842)

** -0.1502

(0.0217)

** 0.0127

(0.0394)

Pioneer Electech 1.9669

(0.3953)

**

Polk 0.8673

(0.0477)

** 0.6994

(0.0783)

**

Polyflame 0.5786

(0.3240)

*

RCA -0.7437

(0.0992)

** -0.3371

(0.0197)

** -0.6318

(0.2803)

** -0.8544

(0.1361)

** 0.4453

(0.1730)

** -0.3915

(0.0445)

**

Recoton 0.3863

(0.1577)

** 0.0473

(0.1413)

Rock Solid 1.2410

(0.0802)

**

Rockustics 1.3197

(0.0867)

**

Rotel 0.8977

(0.1985)

** 0.9466

(0.3118)

**

Samsung -0.2611

(0.3083)

Sansui -0.8506

(0.4417)

*

Sanyo -0.4158

(0.0288)

** 0.2439

(0.1578)

Sharp -0.3144

(0.0305)

** -0.1845

(0.0468)

**

Sherwood -0.5394

(0.4413)

-0.2942

(0.1553)

*

Snell 1.2873

(0.3940)

**

Sonance 0.9820

(0.0805)

**

Soundesign -0.8593

(0.0625)

**

Speakercraft 0.5702

(0.2028)

**

Stereostone 0.2406

(0.1420)

*

Sumiko 2.5607

(0.0713)

** 1.5772

(0.1347)

**

Symphonics -0.8845

(0.1486)

**

Teac -0.6129

(0.1991)

**

Technics -0.2931

(0.0377)

** -0.2434

(0.0631)

** -0.4114

(0.0926)

** -0.2853

(0.0249)

** 0.4320

(0.0662)

**

Toshiba -0.0190

(0.3090)

Venturer -0.5422

(0.1628)

**

Velodyne 1.5598

(0.0885)

**

Wilson -0.6885

(0.1502)

**

Yamaha 0.0287

(0.0429)

-0.5201

(0.0573)

** -0.3598

(0.0782)

** 0.3824

(0.0236)

** 0.5024

(0.0538)

**

Zenith -0.1038

(0.1296)

Note: Numbers in parentheses are standard errors.

** Significant at the 99 percent level.

* Significant at the 95 percent level.
44

Appendix Figure 1

U.S. Department of Labor

Bureau of Labor Statistics

Consumer Price Index - ELI Checklist

____________________________________________________________________________________

____________________________________________________________________________________

 Collection Outlet Quote Arranging

 Period: __ __ __ __ Number: __ __ __ __ __ __ __ Code: __ __ __ Code: __ __ __ __

 ___________________________________________________________________________________

 ELI No./ Cluster title

RA051 AUDIO COMPONENTS, RADIOS, TAPE RECORDERS/PLAYERS, OTHER code 01

____________________________________________________________________________________

Item Availability: 1-AVAILABLE 2-ELI NOT SOLD 3-INIT INCOMPLETE Purpose of

Checklist: 1-INIT 2-INIT COMPL 3-SPEC CORR 4-SUB 5-REINIT 6-CHECK

REV________________________________________________________________________________

____

 CURRENT PERIOD SALES TAX

 

 Price _ _ _ _ _ _ . _ _ _ Included: YES NO

 

 Type of Price: REG SALE 

____________________________________________________________________________________

 YEAR-ROUND in-season: JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

____________________________________________________________________________________

 Respondent: Location:

____________________________________________________________________________________

 Field Message:

____________________________________________________________________________________

 CLUSTER 01 - RADIOS, PHONOGRAPHS AND TAPE RECORDERS/PLAYERS

 TYPE

 NUMBER OF TAPE UNITS

 A1 Radio, tape recorder/ K1 Single tape unit

 player combination K2 Dual tape unit

 A2 Radio, tape player

 Combination TYPE OF TAPE USED

 A3 Radio M1 Standard cassette

 A4 Tape recorder/player M99 Other,

 A5 Tape player __________________

 BRAND FEATURES

 N1 Headphones included as

 B99 __________________ standard equipment

 P1 Clock radio, digital

 MODEL NUMBER P2 Clock radio, analog face

 Q1 One tone control

 C99 __________________ Q2 Two tone controls

 Q99 Other _______________

STYLE

 D1 Personal portable S1 Variable tone control(s)

 music system S2 Switchable tone controls

 D2 Portable (carry about) T1 Built-in microphone(s)
45

 D3 Table model T2 External microphone(s) included 

 as standard equipment

 RADIO RECEIVING CAPABILITIES U1 Local/DX switch

 E1 FM stereo V99 Other,

 E2 FM monaural __________________

 F1 AM stereo W99 Other,

 F2 AM monaural __________________

 G99 Short wave band(s), X99 Other,

 number, __________ __________________

 H1 Weather band

 I1 TV band POWER

 J99 Other(s), AA1 AC, house current

 __________________ AB1 DC, Rechargeable battery(ies)

 included as standard equipment

 AB2 DC, nonrechargeable battery(ies)

 equipment included as standard

 AB3 DC, battery(ies)--not included

 AC99 Other,

 __________________
46

Bureau of Labor Statistics

Consumer Price Index - ELI Checklist

____________________________________________________________________________________

____________________________________________________________________________________

 Collection Outlet Quote Arranging

 Period: __ __ __ __ Number: __ __ __ __ __ __ __ Code: __ __ __ Code: __ __ __ __

____________________________________________________________________________________

___

 ELI No./ Cluster

 title RA051 COMPONENTS AND OTHER SOUND EQUIPMENT code 02

____________________________________________________________________________________

___

 Item Availability: 1-AVAILABLE 2-ELI NOT SOLD 3-INIT INCOMPLETE

 Purpose of Checklist: 1-INIT 2-INIT COMPL 3-SPEC CORR 4-SUB 5-REINIT 6-CHECK

REV

____________________________________________________________________________________

___

 CURRENT PERIOD SALES TAX

 

 Price _ _ _ _ _ _ . _ _ _ Included: YES NO

 

 Type of Price: REG SALE

 

 

____________________________________________________________________________________

 YEAR-ROUND in-season: JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

____________________________________________________________________________________

 Respondent: Location:

 ___________________________________________________________________________________

 Field Message:

 ___________________________________________________________________________________

CLUSTER 02 - COMPONENTS AND OTHER SOUND EQUIPMENT

 TYPE

 A1 Individual component

 A2 Component system put together by outlet or consumer

 A3 Component system put together by manufacturer

 A4 Compact systems

 A5 Convertible home/portable component system

 COMPONENT(S) SELECTED FOR PRICING (Reporting of a price is optional)

 B1 Receiver ** C99 $______________________________

 D1 Turntable ** E99 $______________________________

 F1 Compact disk player (CD) ** G99 $______________________________

 H1 Tape deck ** I99 $______________________________
47

 J1 Tuner ** K99 $______________________________

 L1 Integrated amplifier ** M99 $______________________________

 N1 Preamplifier ** P99 $______________________________

 Q1 Power amplifier ** R99 $______________________________

 S99 Speaker(s), Number ** T99 $______________________________

 ______________________________ U1 Casceiver ** V99

$______________________________ W1 Equalizer ** X99

$______________________________

 Y1 Headphones ** AA99 $______________________________

 AB1 Phono cartridge (only ** AC99 $______________________________

 priced with turntable)

 AD99 Other component, ** AE99 $______________________________

 ______________________________

 AF99 Other component, ** AG99 $______________________________

 ______________________________

 AH1 Audio component rack ** AI99 $______________________________

 AJ99 Other equipment, ** AK99 $______________________________

 ______________________________

 AL99 Other equipment, ** AM99 $______________________________

 ______________________________

 AN99 Other equipment, ** AP99 $______________________________

 ______________________________

 BRAND, LINE AND MODEL NUMBER OF A3 OR A5

 AX99 _____________________________

 BRAND AND MODEL NUMBER OF COMPACT SYSTEM - A4

 AY99 _____________________________

 Casceiver - Use the specifications for receivers and tape decks for reporting

 Compact system - Use the specifications for receivers, turntables, speakers and

 if applicable tape decks for reporting.

 -------------------------------------------------------------------------------------------------------------------------------------------

RECEIVER TURNTABLE

 BRAND BRAND

 

 BA99 ________________________ CA99 ______________________________

 

 MODEL NUMBER MODEL NUMBER

 BB99 ________________________ CB99 ______________________________

 RECEIVING CAPABILITIES CAPABILITIES

 BC1 FM stereo CC1 Single play (only one record)
48

 BD1 AM stereo CC2 Multiplay changer

 BD2 AM monaural

 BE99 Other bands ___________________WATTAGE

OPTIONAL PHONO CARTRIDGE

 BG99 __________________ /Channel CD1 Cartridge not included

 CD2 Cartridge included by dealer

REMOTE CONTROL CD3 Cartridge included by manufacturer

 BH1 Not available

 BH2 Standard BRAND AND MODEL OF PHONO CARTRIDGE

 BH3 Optional and not included CE99 ______________________________

 BH4 Optional and included

REMOTE CONTROL

 CF1 Not available

 CF2 Standard

 CF3 Optional and not included

 CF4 Optional and included

 -------------------------------------------------------------------------------------------------------------------------------------------

COMPACT DISC PLAYER TAPE DECK

 BRAND TYPE

 DA1 Cassette (compact cassette)

 CH99 ________________________ DA2 DAT (Digital Audio Tape)

 DA3 Reel-to-reel

 MODEL NUMBER DA99 Other

 CI99 _________________________ ______________________________

 CAPABILITIES BRAND CJ1 Single disc

CJ99 Multidisc changer, # of disc DB99 ______________________________

 _________________________

 MODEL NUMBERTYPE OF LASER PICK-UP

DC99 ______________________________

 CK1 Three Beam

 CK2 One beam NOISE REDUCTION SYSTEM

 CK99 Other ___________________ DG1 Dolby B

DH1 Dolby C system

DI1 DBX II system

 PROGRAMMABILITY DJ99 Other, system

 CL99 Random access programmability, 

 number of tracks programmable CAPABILITIES

 ___________________________ DK1 Single cassette

 DK2 Dual cassette

 CM99 Continuous playback of selected track,

 number of times

 __________________________

 REMOTE CONTROL

 CN1 Continuous playback of entire disc DL1 Remote control not available

 DL2 Remote control standard

 FEATURES DL3 Remote control optional

 CP1 Music scan and not included

 CQ99 Other ____________________ DL4 Remote control optional

 and included

 CR99 Other _____________________ -------------------------------------------------------------------------

 INTEGRATED AMPLIFIER

 CS99 Other _____________________

 BRAND

 FA99 ______________________________
49

 MODEL NUMBER

 REMOTE CONTROL FB99 ______________________________ CT1

Not available

 CT2 Standard WATTAGE

 CT3 Optional and not included FC99 __________________ RMS/Channel CT4

Optional and included

 REMOTE CONTROL ---------------------------------------

----------------------- FD1 Remote control not available

TUNER FD2 Remote control standard

 FD3 Remote control optional and not included

 BRAND FD4 Remote control optional and included

 EA99 ______________________________

MODEL NUMBER

 EB99 ______________________________

 RECEIVING CAPABILITIES

 EC1 FM stereo

 ED1 AM stereo

 ED2 AM monaural

 EE99 Other, Bands

 ____________________________

 REMOTE CONTROL

 EF1 Not available

 EF2 Standard

 EF3 Optional and not included

 EF4 Optional and included

----------------------------------------------------------------------------------------------------------------------------------------

PREAMPLIFIER EQUALIZER

BRAND BRAND

 GA99 _____________________ JA99 ______________________

MODEL NUMBER MODEL NUMBER

 GB99 _____________________ JB99 _______________________

REMOTE CONTROL TYPE

 GC1 Remote control not available JC1 Graphic

 GC2 Remote control standard JC2 Parametric

 GC3 Remote control optional JC99 Other __________________

 and not included GC4 Remote control optional NUMBER OF

BANDS and included JD98

_______________________

 JD99 _______________________-----

---------------------------------------------------------------------------------------------------------------------------------------

POWER AMPLIFIER HEADPHONESBRAND

 BRAND HA99 ______________________________

JG99 ________________________

MODEL NUMBER MODEL NUMBER HB99

______________________________ JH99 ________________________
50

AMPLIFICATION

 HC1 Stereo only

 HC2 Stereo and monaural

 HC3 Monaural only

 HC99 Other __________________________
51

 AUDIO COMPONENT RACK

WATTAGE

 HE99 __________________ RMS/Channel BRAND

 KA99 ________________________

--------------------------------------------------------------------- MODEL NUMBER

SPEAKERS KB99 _______________________

 BRAND SIZE

 IA99 ______________________________ KC99 Width __________________

 MODEL NUMBER KD99 Height __________________

IB99 ______________________________

 KE99 Depth __________________

REPRODUCTION IC1 Two way sound MAIN

CONSTRUCTION MATERIAL IC2 Three way sound KF1

Wood IC99 Other _________________________ KF2 Metal

 KF99 Other ___________________

 WOOFER SIZE (if stated) KG1 Without doors

 ID1 6 inch KG2 With doors

 IE1 8 inch KH99 Door material

 IF1 10 inch

 IG1 12 inch

 IH99 Other,

--------------------------------------------------------------------------------------------------------------------------------------------

OTHER COMPONENTS AND/OR EQUIPMENT _________________________________ TYPE LA99

_________________________________________

BRAND LB99 _________________________________________

 MODEL NUMBER

 LC99 _________________________________________

 OTHER COMPONENTS AND/OR EQUIPMENT

 _________________________________

 TYPE MA99 _________________________________________ BRAND MB99

_________________________________________

 MODEL NUMBER

 MC99 _________________________________________

 The following section may be completed for any item priced.

 ** ADDITIONAL AND CLARIFYING DATA

 NA99 ______________________________________________

 NB99 ______________________________________________

 NC99 ______________________________________________
52