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Consumer Price Index
Bureau of Labor Statistics > Consumer Price Index > Methods > Quality Adjustment

Quality Adjustment in the CPI: Refrigerators

Refrigerators image

Item definition

The Entry Level Item (ELI) category of Refrigerators and Freezers is part of the index for Major Appliances, and includes all refrigerators, freezers, and combination refrigerators-freezers for use in the home. In this factsheet, we examine the regression model used in the quality adjustment of price data for refrigerators. All refrigerators used to create the quality-adjustment model include a built-in freezer.

CPI sample

The sample used for the new hedonic model included approximately 90 observations. About 65 percent of observations were sourced from the web, while the remaining 35 percent were quotes from traditional collection. All prices were from June or July of 2021. There were 8 brands in the sample and nearly 70 distinct refrigerator models. The top 3 brands accounted for 60 percent of observations. There were 10 distinct outlets in the sample, and the top 3 outlets accounted for 81 percent of observations.  

Current Model

Table 1 presents the details of the current model used to quality adjust refrigerators.

Table 1. Parameter estimates for the hedonic regression for refrigerators.
Variable name DF Parameter estimate Standard error t Value Pr > |t| Tolerance

Intercept

 1 6.168 0.105 58.91 <.0001

Size: Total capacity

 1 0.031 0.005 6.04 <.0001 0.297

Style: 2-Door, bottom freezer

 1 0.552 0.064 8.60 <.0001 0.786

Style: 3-Door, French

 1 0.671 0.038 17.81 <.0001 0.528

Style: 4-Door, French

 1 0.579 0.060 9.61 <.0001 0.354

Features: Dispenser

 1 0.256 0.043 5.99 <.0001 0.314

Features: Touchscreen control interface

 1 0.196 0.061 3.22 0.002 0.878

Features: LED lights

 1 -0.093 0.039 -2.35 0.021 0.580

Features: Convertible zone

 1 0.301 0.059 5.12 <.0001 0.346

Appearance: Counter depth

 1 0.215 0.035 6.09 <.0001 0.645

Appearance: Contoured doors

 1 0.230 0.040 5.77 <.0001 0.359

Appearance: Color (white or black)

 1 -0.059 0.039 -2.00 0.049 0.714

Control: Outlet #1

 1 -0.066 0.031 -2.11 0.034 0.853

Summary notes

  • Quality adjustments derived from hedonic regressions for refrigerators were first incorporated into the CPI in 2001. Since then, the model for refrigerators has been updated 5 times, including the update described in this report.

  • The base characteristics used for this model were a free-standing, standard-depth refrigerator – either a top-freezer or side-by-size model – with a touchpad interface, no dispenser, in stainless steel color. 

  • For refrigerators, the characteristics that received the most focus during the model evaluation include  style, depth, and features.

  • Variables in the style category have the largest influence on prices for refrigerators. French-style and bottom freezer models are a premium compared with top-freezer and side-by-side refrigerators. The inclusion of style in this model diminished the influence of the total capacity variable. In the sample used for this model update, french-style and bottom-freezer models were, on average, 5 cubic feet larger than top-freezer and side-by-side refrigerators.

  • Another characteristic that surfaced as a price differentiator was depth. Counter-depth refrigerators are free-standing appliances with a depth of 30” or less. They are designed to sit flush with countertops, giving the appearance of a built-in appliance. In the sample used for this hedonic model, counter-depth models were, on average, 3 cubic feet less than standard-depth refrigerators but were 23 percent more expensive.

  • One variable that was significant in several previous models but not in this version is the presence of an ice maker. This feature was present in more than two-thirds of observations in the sample. However, the presence of a dispenser (either ice and water or water only) was more influential on price, holding all other factors constant. 

  • Compared to previous hedonic models, two characteristics were added to the quality-adjustment model with this update: LED lighting and a convertible zone feature. 

    • The variable for LED lighting has a negative coefficient, indicating that refrigerators with this feature tend to be less expensive than similar models with incandescent lighting.

    • Refrigerators with a convertible zone have one compartment with a dedicated temperature control. The compartment can either be a freezer or a refrigerator. This feature was present in approximately 14 of refrigerators in the sample.

Data

Access data for Major appliances in our online database.

Additional information

Additional information may be obtained from the Consumer Price Index Information Office by email or calling 202-691-7000. Information on the CPI's overall methodology can be found in the BLS Handbook of Methods.

Last modified date: February 22, 2023