Quality Adjustment in the CPI: Watches : U.S. Bureau of Labor Statistics

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

Quality Adjustment in the CPI: Watches

Item Definition

The Entry Level Item (ELI) watches is part of the index for jewelry and watches. Here, we examine the hedonic regression model used in the quality adjustment of price data for watches.

Sample

The sample used for this hedonic model included 675 observations from an extract of CPI data from November and December 2022. The CPI data was collected using a larger than usual amount of web-based information due to restrictions on data collection during the COVID-19 pandemic. There were more than 153 unique brands in the sample, with none amounting to more than 10 percent of the total sample. There were also 93 different outlets, the top two of which account for about a third of the sample.

Current Model

Table 1. Parameter estimates for the hedonic regression for watches
Variable Name	DF	Parameter Estimate	Standard Error	T Statistic	Pr > \|t\|	Tolerance Statistic
Intercept	1	4.60555	0.08881	51.86	<.0001
Attachment Type: Bracelet	1	0.27624	0.05329	5.18	<.0001	0.73432
Attachment Type: Band		Base
Case Material: Premium	1	0.66719	0.16803	3.97	<.0001	0.90382
Case Material: Non-premium	1	-0.2455	0.06931	-3.54	0.0004	0.60435
Case Material: Stainless steel		Base
Brand Category: Exclusive	1	1.2073	0.10827	11.15	<.0001	0.50805
Brand Category: Private	1	-1.7946	0.1342	-13.37	<.0001	0.49316
Brand Category: Miscellaneous	1	-0.9109	0.13409	-6.79	<.0001	0.91422
Brand Category: Low national	1	-0.8507	0.10606	-8.02	<.0001	0.42723
Brand Category: National		Base
Power Source & Movement: Manual	1	0.36297	0.14461	2.51	0.0123	0.906
Power Source & Movement: Self-wind	1	0.83416	0.09203	9.06	<.0001	0.76714
Power Source & Movement: Solar	1	0.33131	0.08412	3.94	<.0001	0.72482
Power Source & Movement: Battery/electronic		Base
Age: Children	1	-0.77100	0.09329	-8.26	<.0001	0.68435
Age: Adults (all)		Base
Watch Crystal Material: Sapphire	1	0.62716	0.07973	7.87	<.0001	0.49865
Watch Crystal Material: Plastic	1	-0.1652	0.07403	-2.23	0.026	0.69845
Watch Crystal Material: K1	1	0.38208	0.17721	2.16	0.0314	0.75959
Watch Crystal Material: Mineral & other		Base
Precious Stones: Diamonds	1	0.50931	0.11466	4.44	<.0001	0.89968
Precious Stones: Not diamonds		Base
Details & Features: Calendar	1	0.22135	0.05309	4.17	<.0001	0.73592
Details & Features: Water resistant	1	0.22187	0.06813	3.26	0.0012	0.72233
Details & Features: Crystals or rhinestones	1	0.33221	0.09007	3.69	0.0002	0.88294
Details & Features: None & other		Base

Note: This model contains control variables for type of business, metropolitan area, and region but they are not used for adjustments.

Summary Notes

This is the first-ever CPI quality adjustment model for watches. That means that far fewer watches substitutions will be deemed non-comparable and imputed.
The premium materials for watch case materials include solid gold and titanium.
The most important factors in deciding on substitutions for watches are attachment type, case material, brand, power source, and watch crystal material. All of these were included. The watch band material was not included in this model.

Data

Access data for watches 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: April 5, 2024