Advanced Search
MyIDEAS: Login

A winning formula? Elementary indices in the Retail Prices Index

Contents:

Author Info

  • Peter Levell

    ()
    (Institute for Fiscal Studies)

Registered author(s):

    Abstract

    This paper considers the case for replacing the Carli index in the Retail Prices Index for calculating price changes at the elementary aggregate level. Following Diewert (2012), we go through each of the three approaches used to select appropriate index numbers: the test, stochastic and economic approaches. In each case, we find a few areas where our conclusions differ from Diewert's. Unlike Diewert, we are not as concerned that the Carli fails the time reversibility test, but note that it fails a revised price bouncing test. We find that the stochastic approach is inapplicable at the level of elementary aggregates, where by definition quantity weights for goods are unknown. However, we argue using insights from information theory, that the economic approach can be applied at this level and moreover that it favours the use of the Jevons index.

    Download Info

    If 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.
    File URL: http://www.ifs.org.uk/wps/wp1222.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W12/22.

    as in new window
    Length:
    Date of creation: Nov 2012
    Date of revision:
    Handle: RePEc:ifs:ifsewp:12/22

    Contact details of provider:
    Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
    Phone: (+44) 020 7291 4800
    Fax: (+44) 020 7323 4780
    Email:
    Web page: http://www.ifs.org.uk
    More information through EDIRC

    Order Information:
    Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
    Email:

    Related research

    Keywords: Retail Prices Index;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Crossley, Thomas F. & Pendakur, Krishna, 2010. "The Common-Scaling Social Cost-of-Living Index," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(4), pages 523-538.
    2. Diewert, W E, 1973. "Afriat and Revealed Preference Theory," Review of Economic Studies, Wiley Blackwell, vol. 40(3), pages 419-25, July.
    3. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-73, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:12/22. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Seavers).

    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.