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With which Index should we index Incomes?

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  • Warren, N.A.

    (University of New South Wales, kensington, NSW)

Abstract

The Consumer Price Index (CPI) is an empirical concept which is often misused. This paper examines its use in indexing wages for the effects of changes in the prices of the goods consumed by wage earners. It is shown that the CPI is an inappropriate measure, especially when wage bargaining involves not only nominal wage increase, but also tax and social wage changes. A range of more appropriate measures are considered and recommended, each dependent on what is sought by those at the wage bargaining table.

Suggested Citation

  • Warren, N.A., 1990. "With which Index should we index Incomes?," Economic Analysis and Policy, Elsevier, vol. 20(1), pages 83-110.
    • Handle: RePEc:eee:ecanpo:v:20:y:1990:i:1:p:83-110
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