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The Consumer Price Index: Conceptual Issues and Practical Suggestions

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  • Charles L. Schultze

Abstract

A National Academy of Sciences Panel recently made a number of recommendations to the BLS for improving the Consumer Price Index, while also suggesting some cautions to be observed when considering the adoption of new concepts and techniques. This paper discusses the Panel's analyses in four areas: Should a cost-of-living index be the measurement objective of the CPI? Should the index attempt to capture the effect on living costs from changes in "environmental" conditions? How can hedonic techniques be best applied for measuring quality changes? Should the BLS attempt to measure the consumer surpluses accompanying the introduction of new goods?

Suggested Citation

  • Charles L. Schultze, 2003. "The Consumer Price Index: Conceptual Issues and Practical Suggestions," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 3-22, Winter.
    • Handle: RePEc:aea:jecper:v:17:y:2003:i:1:p:3-22
    Note: DOI: 10.1257/089533003321164921
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/089533003321164921
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    References listed on IDEAS

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    1. Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1, January.
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    Cited by:

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    4. Basak, Suleyman & Pavlova, Anna, 2004. "Monopoly Power and the Firm€ٳ Valuation:," Working papers 4234-01, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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    6. Richard S. J. Tol, 2016. "Population and trends in the global mean temperature," Papers 1612.09123, arXiv.org.
    7. Gaddis,Isis, 2016. "Prices for poverty analysis in Africa," Policy Research Working Paper Series 7652, The World Bank.
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    10. Reis, Hugo J. & Santos Silva, J.M.C., 2006. "Hedonic prices indexes for new passenger cars in Portugal (1997-2001)," Economic Modelling, Elsevier, vol. 23(6), pages 890-908, December.
    11. Tilton, John E., 2013. "The terms of trade debate and the policy implications for primary product producers," Resources Policy, Elsevier, vol. 38(2), pages 196-203.
    12. Panzone, Luca A. & Wossink, Ada & Southerton, Dale, 2013. "The design of an environmental index of sustainable food consumption: A pilot study using supermarket data," Ecological Economics, Elsevier, vol. 94(C), pages 44-55.
    13. Reinhold Kosfeld & Hans-Friedrich Eckey & Jorgen Lauridsen, 2008. "Disparities in Prices and Income across German NUTS 3 Regions," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 54(2), pages 123-141.
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    15. Fredrik Andersson & Harry J. Holzer & Julia Lane, 2009. "Temporary Help Agencies and the Advancement Prospects of Low Earners," NBER Chapters, in: Studies of Labor Market Intermediation, pages 373-398, National Bureau of Economic Research, Inc.
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    18. Gregory Crawford & Evan Kwerel & Jonathan Levy, 2008. "Economics at the FCC: 2007–2008," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(3), pages 187-210, November.
    19. Tsuyoshi Sasaki, 2019. "Welfare evaluations and price indices with path dependency problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(1), pages 127-159, January.
    20. Svedberg, Peter & Tilton, John E., 2006. "The real, real price of nonrenewable resources: copper 1870-2000," World Development, Elsevier, vol. 34(3), pages 501-519, March.
    21. Leonardo Ciambezi & Alessandro Pietropaoli, 2024. "Relative price shocks and inequality: evidence from Italy," Questioni di Economia e Finanza (Occasional Papers) 883, Bank of Italy, Economic Research and International Relations Area.
    22. Ingvild Almås & Tim Beatty & Thomas Crossley, 2018. "Lost in translation: What do Engel curves tell us about the cost of living?," IFS Working Papers W18/04, Institute for Fiscal Studies.
    23. Marshall Reinsdorf & Jack E. Triplett, 2009. "A Review of Reviews: Ninety Years of Professional Thinking About the Consumer Price Index," NBER Chapters, in: Price Index Concepts and Measurement, pages 17-83, National Bureau of Economic Research, Inc.
    24. Dreger Christian & Kosfeld Reinhold, 2010. "Do Regional Price Levels Converge?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(3), pages 274-286, June.

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