Constructing price indexes across space and time: the case of the European Union
AbstractThis paper considers the problem of how to construct and reconcile price indexes across space and time. Six methods for constructing price indexes on a panel are proposed along with five criteria for discriminating between them. Using these methods, spatial and temporal price indexes are computed for the 15 countrie s of the European Union (EU) over the period 1995-2000 using a panel data set constructed by merging, at a low level of aggregation, the EU’s Harmonized Index of Consumer Prices (HICP) with a cross-section of OECD data. These panel price indexes are then used to test whether or not price levels and relative prices converged across the EU over this period.
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Bibliographic InfoPaper provided by Groningen Growth and Development Centre, University of Groningen in its series GGDC Research Memorandum with number 200362.
Date of creation: 2003
Date of revision:
Other versions of this item:
- Robert J. Hill, 2004. "Constructing Price Indexes across Space and Time: The Case of the European Union," American Economic Review, American Economic Association, vol. 94(5), pages 1379-1410, December.
- Hill, Robert J., 2003. "Constructing price indexes across space and time: the case of the European Union," Research Report 03C20, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-GEO-2003-07-10 (Economic Geography)
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