Index Number Issues in the Consumer Price Index
AbstractThis paper addresses the following issues: what is an appropriate theoretical consumer price index that statistical agencies should attempt to measure; what are some of the possible sources of biases between the fixed base Laspeyres price index that statistical agencies produce and the theoretical cost-of-living index; and what factors will make the biases larger or smaller and how will the biases change as the general inflation rate changes? This paper addresses all of the issues mentioned above and discusses what statistical agencies can do to reduce the biases.
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Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 12 (1998)
Issue (Month): 1 (Winter)
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Hausman, J.A., 1994.
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94-21, Massachusetts Institute of Technology (MIT), Department of Economics.
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- Jerry Hausman, 1997.
"Cellular Telephone, New Products and the CPI,"
NBER Working Papers
5982, National Bureau of Economic Research, Inc.
- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
- Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1, October.
- Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
- Lloyd, P J, 1975. "Substitution Effects and Biases in Nontrue Price Indices," American Economic Review, American Economic Association, vol. 65(3), pages 301-13, June.
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