1. The RPPI Handbook Project Bert M. Balk Statistics Netherlands and Rotterdam School of Management Erasmus University UNECE/ILO Meeting on CPI, Geneva, 10-12 May 2010

2. Funding This project is funded by Eurostat, under the auspices of the Intersecretariat Working Group on Price Statistics, and executed by Statistics Netherlands.

3. Context International Manuals/Handbooks: – Consumer Price Index Manual (ILO) – Producer Price Index Manual (IMF) – Export and Import Price Index Manual (IMF) – Measuring Capital (OECD) – Measuring Productivity (OECD) – …

4. Important uses of RPPIs – Economic analysis (relating RPPIs to fundamentals, detection of bubbles, etc.) – Risk management by mortgage providers – Indicator of Financial Soundness (IMF/BIS) – Principal European Economic Indicator (Eurostat) – Wealth measurement (National Accounts, international comparison) – Measurement of dwelling services (CPI)

5. Residential Property Price Index Overall target of measurement: Value change of RP stock. Various subsidiary targets. Main problems: – Universe (RP stock) changes by addition, removal, depreciation, renovation – Prices only observed for transactions – Observed prices registered at different dates – Including or excluding land – Seasonal adjustment or not

6. Main methods – Comparing (stratified) central location measures of transaction prices – Comparing repeat sales transaction prices – Comparing transaction prices to assessment (appraisal) prices – Hedonic regression method Ideally each method should be able to – account for depreciation and renovation, – make the land-structure split.

7. Data sources – Official registers – Mortgage companies / banks – Organisations of real estate agents – Surveys by NSOs

8. Tentative contents + progress ChapterFirst draftFinal draft 1. Preface 2. Introduction 3. Uses √ 4. Conceptual elements √ 5. Methods √ 6. Data sources √ 7. Catalogue of available indices + some cases √ 8. Recommendations 9. Glossary + index 10. Annex: Examples

9. Timing of activities May 2009Start Nov 2009Eurostat-IAOS-IFC Basel conference: presentation of project and gathering of user needs May 2010UNECE/ILO CPI Meeting: First partial drafts available Sept 2010Second draft available Feb 2011RPPI Workshop: Third draft available May 2011Final draft

10. Team Bert M. Balk – Statistics Netherlands; Rotterdam School of Management, Erasmus University Jan de Haan – Statistics Netherlands W. Erwin Diewert – University of British Columbia Marc Prud’homme – Statistics Canada; University of Ottawa David Fenwick - consultant

11. Contact bbalk@rsm.nl