Whose inflation? A characterization of the CPI plutocratic gap
AbstractPrais (1958) showed that the standard CPI computed by most statistical agencies can be interpreted as a weighted average of household price indexes, where the weight of each household is determined by its total expenditures. In this paper, we decompose the CPI plutocratic gap--i.e. the difference between the standard CPI and a democratically-weighted index, where each household has the same weight--as the product of expenditure inequality and the sample covariance between the elementary individual price indexes and a term which is a function of the expenditure elasticity of each good. This decomposition allows us to interpret variations in the size and sign of the plutocratic gap, and to discuss issues pertaining to group indexes. Copyright 2005, Oxford University Press.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 57 (2005)
Issue (Month): 4 (October)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/
Other versions of this item:
- Eduardo Ley, 2001. "Whose Inflation? A Characterization of the CPI Plutocratic Gap," Public Economics, EconWPA 0110001, EconWPA, revised 20 Oct 2001.
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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.:
- S. Nuri Erbas & Chera L. Sayers, 1998. "Is the United States CPI Biased Across Income and Age Groups?," IMF Working Papers, International Monetary Fund 98/136, International Monetary Fund.
- Angus Deaton, 1998. "Getting Prices Right: What Should Be Done?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 12(1), pages 37-46, Winter.
- Mario Izquierdo & Eduardo Ley & Javier Ruiz-Castillo, 2003. "The Plutocratic Gap in the CPI: Evidence from Spain," IMF Staff Papers, Palgrave Macmillan, Palgrave Macmillan, vol. 50(1), pages 7.
- Yitzhaki, Shlomo, 1996. "On Using Linear Regressions in Welfare Economics," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 14(4), pages 478-86, October.
- Newbery, David M, 1995. "The Distributional Impact of Price Changes in Hungary and the United Kingdom," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 105(431), pages 847-63, July.
- Jorgenson, Dale W & Slesnick, Daniel T, 1999. "Indexing Government Programs for Changes in the Cost of Living," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 17(2), pages 170-81, April.
- Pollak, Robert A, 1980. "Group Cost-of-Living Indexes," American Economic Review, American Economic Association, American Economic Association, vol. 70(2), pages 273-78, May.
- Frank Cowell, 2006.
LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library
2686, London School of Economics and Political Science, LSE Library.
- Frank A Cowell, 2006. "Inequality: Measurement," STICERD - Distributional Analysis Research Programme Papers, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE 86, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Ehrmann, Michael & Tzamourani, Panagiota, 2012.
"Memories of high inflation,"
European Journal of Political Economy, Elsevier,
Elsevier, vol. 28(2), pages 174-191.
- Thomas F. Crossley & Krishna Pendakur, 2006.
"The Social Cost-of-Living: Welfare Foundations and Estimation,"
Social and Economic Dimensions of an Aging Population Research Papers, McMaster University
155, McMaster University.
- Thomas F. Crossley & Krishna Pendakur, 2006. "The Social Cost-of-Living: Welfare Foundations and Estimation," Quantitative Studies in Economics and Population Research Reports, McMaster University 407, McMaster University.
- Thomas Crossley & Krishna Pendakur, 2006. "The social cost-of-living: welfare foundations and estimation," IFS Working Papers, Institute for Fiscal Studies W06/10, Institute for Fiscal Studies.
- Morne Oosthuizen, 2013. "Inflation Inequality In South Africa," Working Papers, University of Cape Town, Development Policy Research Unit 13158, University of Cape Town, Development Policy Research Unit.
- Goni, Edwin & Lopez, Humberto & Serven, Luis, 2006. "Getting realabout inequality : evidence from Brazil, Colombia, Mexico, and Peru," Policy Research Working Paper Series, The World Bank 3815, The World Bank.
- Morné Oosthuizen, 2007. "Consumer Price Inflation across the Income Distribution in South Africa," Working Papers, University of Cape Town, Development Policy Research Unit 07129, University of Cape Town, Development Policy Research Unit.
- repec:ebl:ecbull:v:4:y:2002:i:3:p:1-5 is not listed on IDEAS
- David Fielding, 2010. "Non-monetary Determinants of Inflation Volatility: Evidence from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 19(1), pages 111-139, January.
- Liberati, Paolo, 2012. "Democratic, Plutocratic and Social Weights in Price Indexes," MPRA Paper 43978, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.