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In a series of studies, researchers examined how housing rents are assessed in official price indexes, such as the U.S. Bureau of Labor Statistics' consumer price index, or CPI, and the U.S. Bureau of Economic Analysis's index for personal consumption expenditure, or PCE, which are both designed to show price moves based on the prices of a collection of consumer goods. The rent information the bureaus collect may lead to errors in the inflation rates, said Jiro Yoshida, associate professor, the Penn State Smeal College of Business.

Both the CPI and PCE use results from questionnaires that are sent out to existing tenants to gather information about the housing rents, according to the researchers. Because the Bureau of Labor Statistics sends these questionnaires to the same people over time, they usually collect information on renewal rents, which tend to be less volatile than new rents, according to the researchers. Landlords do not always raise rents on existing tenants, but are more willing to change rents for new tenants, they added.

"Landlords tend to increase rents when tenants change. The official rent surveys, then, tend to miss that big change," said Yoshida, who worked with Brent W. Ambrose, Smeal Professor of Risk Management and director of the Institute for Real Estate Studies, Penn State and N. Edward Coulson, professor emeritus of economics, Penn State and professor of economics and director of Research, Center for Real Estate, University of California, Irvine.