IDEAS home Printed from https://ideas.repec.org/a/bla/revinw/v52y2006i2p309-325.html
   My bibliography  Save this article

When Does Chaining Reduce The Paasche–Laspeyres Spread? An Application To Scanner Data

Author

Listed:
  • Robert J. Hill

Abstract

It is generally believed that chaining reduces the Paasche–Laspeyres spread if prices and quantities are monotonic over time. I consider three alternative definitions of monotonicity and show that none provide either necessary or sufficient conditions for chaining to reduce the Paasche–Laspeyres spread. What matters is the interaction between prices and quantities both in the same period and lagged one period. Sufficient conditions are derived, and the implications of these conditions for the measurement of inflation are considered. The paper concludes with an empirical illustration using scanner data.

Suggested Citation

  • Robert J. Hill, 2006. "When Does Chaining Reduce The Paasche–Laspeyres Spread? An Application To Scanner Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(2), pages 309-325, June.
    • Handle: RePEc:bla:revinw:v:52:y:2006:i:2:p:309-325
    DOI: 10.1111/j.1475-4991.2006.00189.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4991.2006.00189.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4991.2006.00189.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivancic, Lorraine & Fox, Kevin J., 2013. "Can dissimilarity indexes resolve the issue of when to chain price indexes?," Economics Letters, Elsevier, vol. 118(1), pages 6-9.
    2. Alegre, Joaquín & Sard, Maria, 2015. "When demand drops and prices rise. Tourist packages in the Balearic Islands during the economic crisis," Tourism Management, Elsevier, vol. 46(C), pages 375-385.
    3. Iqbal A. Syed & Jan De Haan, 2017. "Age, Time, Vintage, And Price Indexes: Measuring The Depreciation Pattern Of Houses," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 580-600, January.
    4. Gregory Kurtzon, 2022. "How much does formula versus chaining matter for a cost‐of‐living index? The CPI‐U versus the C‐CPI‐U," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 645-667, April.
    5. Ludwig von Auer, 2024. "Inflation Measurement in the Presence of Stockpiling and Smoothing of Consumption," Research Papers in Economics 2024-02, University of Trier, Department of Economics.
    6. Chris Bojke & Adriana Castelli & Katja Grašič & Andrew Street, 2017. "Productivity Growth in the English National Health Service from 1998/1999 to 2013/2014," Health Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 547-565, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:revinw:v:52:y:2006:i:2:p:309-325. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iariwea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.