(BOJ Review) Expanding and Revising the Application of Hedonic Quality Adjustment in the Corporate Goods Price Index

The Bank of Japan is expanding and refining the use of hedonic quality adjustment in the Corporate Goods Price Index (CGPI). This index currently uses the hedonic method for five products, such as passenger cars. As part of the CGPI's rebasing to a 2025 base year, officials are considering broadening the range of products subject to hedonic adjustments and adjusting the method for certain items.

Firstly, a time-dummy hedonic method will be applied to microprocessors. This change aims to better reflect price trends in the rapidly evolving semiconductor market. Secondly, the hedonic method for passenger cars will be updated to account for quality differences in advanced autonomous driving technology. Lastly, separate hedonic models will be used for interchangeable-lens camera bodies and their lenses to evaluate differences in lens performance more precisely.

The Bank of Japan's goal is to enhance the accuracy of quality adjustments in the CGPI. This report, released in English as 2026-E-11, is a translation of the original Japanese publication from June 2026. The views expressed in this document are those of the authors and do not necessarily represent the official stance of the Bank. For any inquiries, readers can contact the Bank's Research and Statistics Department via email at post.rsd3@boj.or.jp.