Internet Domain Name Index
Internet Domain Name Index, IDNX, is a price index for Internet domain names that tracks changes in the value of domains at the aggregate level. The index builds on the premise that domain names are comparable to developable land. Domains are seen as "locations" on the Internet where companies or individuals can set-up a business or just a personal homepage. This core analogy warrants the transfer of theoretical and empirical frameworks from academic real estate research to domains as "virtual land".
The time period covered by IDNX reaches back to January 2006. The update frequency is monthly.
IDNX is estimated in two steps. First, a hedonic repeat sales regression gives 12 annual price indices, all starting at different months of the year. By looking at repeat sales of similar domains, the inherent quality of the domains is controlled for. In a second step, these staggered annual indices are converted to a monthly index using a frequency conversion technique developed by David Geltner and Sheharyar Bokhari (both from MIT). By first estimating indexes at the annual frequency and later converting them to monthly numbers reduces the volatility in index estimates without imposing an explicit time-structure.[1]
The empirics are based on a large data set of more than 200 000 (as of Oct. 2011) real domain transactions facilitated by the domain market place Sedo.
IDNX was launched in July 2011 by Thies Lindenthal[2].
References
- ^ S. Bokhari and D. Geltner. 2010. Estimating Real Estate Price Movements for High Frequency Tradable Indexes in a Scarce Data Environment, Journal of Real Estate Finance and Economics.
- ^ Th. Lindenthal holds a PhD in Real Estate Finance from Maastricht University, The Netherlands
Further Readings
- Internet Domain Name Index (IDNX), http://www.idnx.com
- Thies Lindenthal, Valuable Words: Pricing Internet Domain Names, Working Paper, 2011, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1885465
- Could Domain Names Predict the Next Recession? http://www.foxbusiness.com/technology/2011/07/13/could-domain-names-predict-next-recession/
- On Rushes and Riches: The ?Wild West? Era for Internet Domain Names Is Over as Efficient Markets for This ?Virtual Land? Have Emerged, http://blogs.scientificamerican.com/guest-blog/2011/08/24/on-rushes-and-riches-the-wild-west-era-for-internet-domain-names-is-over-as-efficient-markets-for-this-virtual-land-have-emerged/