To calculate hedonic price indices in the linear model, the initial or reference price has to be calculated (Triplett, 2006). The present study adopts the approach of de Haan and Diewert (2013): a price index is constructed using the price generated by the estimated coefficients of a base period regression model, and it is calculated based on the based period average values of a given cell phone plan characteristic z¯ for each operator (Supplementary Table S5). For continuous characteristics, direct averages are used; for binary characteristics, the proportions of cell phone plans containing the feature are used. The resulting prices for this average cell phone plan are converted to an index by applying previously calculated pure price changes (δs). Finally, the overall hedonic price index is calculated as the weighted average of firm-level indices. Weights correspond to the relative proportion of cell phone plans by operator in the sample (0.3534 for HT, 0.3212 for Vip, and 0.3254 for Tele2).
