The Laspeyres bias in the Spanish consumer price index
AbstractThe CPI compares the cost of acquiring a reference quantity vector at current and base prices. Such reference vector is the vector of mean quantities actually bought by a reference population, whose consumption patterns are investigated during a period τ prior to the index base period 0. This paper shows that unless the price change between these two dates is taken into account, the CPI ceases to be a proper statistical price index of the Laspeyres type. Among several negative consequences, the most important is that this omission produces a bias in the measurement of inflation: the 'Laspeyres bias'. Using Spanish data, the size of the Laspeyres bias is estimated at -0.061% per year, during 1992-1998. The Laspeyres bias in shorter time periods reached -0.122% per year in 1992, and -0.108 in 1997.
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 Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 34 (2002)
Issue (Month): 18 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
Other versions of this item:
- Javier Ruiz Castillo & Eduardo Ley & Mario Izquierdo, . "The laspeyres bias in the Spanish consumer price index," Working Papers 2000-05, FEDEA.
- Javier Ruiz-Castillo & Eduardo Ley & Mario Izquierdo, . "The Laspeyres bias in the Spanish consumer price index," Studies on the Spanish Economy 72, FEDEA.
- 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
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Okidi, John A. & Nsubuga, Vincent, 2010. "Inflation Differentials Among Ugandan Households: 1997 - 2007," Research Series 150482, Economic Policy Research Centre (EPRC).
- Okidi, John A. & Nsubuga, Vincent, 2010. "Inflation differentials among Ugandan household: 1997 - 2007," Research Reports 102497, Economic Policy Research Centre (EPRC).
- Javier Ruiz-Castillo & Eduardo Ley & Mario Izquierdo, .
"Distributional aspects of the quality change bias in the CPI: Evidence from Spain,"
Studies on the Spanish Economy
- Ruiz-Castillo, Javier & Ley, Eduardo & Izquierdo, Mario, 2002. "Distributional aspects of the quality change bias in the CPI: evidence from Spain," Economics Letters, Elsevier, vol. 76(1), pages 137-144, June.
- Javier Ruiz Castillo & Eduardo Ley & Mario Izquierdo, . "Distributional aspects of the quality change bias in the CPI: Evidence from Spain," Working Papers 2000-08, FEDEA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.