October 10, 1998

Development of an Indicator for the Homeowner Improvement and Repairs Market

Kermit Baker, J. Michael Collins, Andrea Hopf

W98-6: Although conservatively estimated at $90 billion a year, data on spending by U.S. homeowners on improvements and repairs to their homes are not reported on a timely basis, and quarterly estimates provided by the U.S. Department of Commerce typically are very volatile. An indicator of remodeling activity by homeowners that remedies these problems is presented in this paper. It uses readily available government data that have a high correlation with homeowner remodeling activity, that are released on a timely basis, and that provide a stable estimate of spending in this industry. The Remodeling Activity Indicator (RAI) is shown to estimate annual spending levels within 5% of accuracy over 75% of the time, and to accurately measure turning points within the industry. The principal applications of this indicator are to help companies in this industry to monitor market trends on timely basis, and to track changes in market share of their products…

Category: Working Papers

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