Aggregate Indices and Their Corresponding Elementary Indices
Abstract“Which index formula at the elementary level, where no expenditure share weights are available, corresponds to a desired aggregate index?” To answer this question, this paper develops a statistical approach. It proposes a theoretical framework which makes it possible to achieve numerical equivalence of an elementary index with the Laspeyres, Paasche or Fisher price index. Depending on the price elasticity, different elementary indices should be applied to different groups of goods in order to approach the desired aggregate index as closely as possible. Furthermore, the new statistical approach assures internal consistency between price and volume measurement.
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Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 230 (2010)
Issue (Month): 6 (December)
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Generalised mean; quadratic mean; log-normal distribution; partial adjustment model; price elasticity; internal consistency;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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