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The Wrongs And Rights Of Unit Value Indices

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  • Mick Silver

Abstract

There are two sides to unit value indices. The first is their widespread and unwarranted use based on customs data as surrogates for price relatives of product groups of exports and imports. For the aggregation of heterogeneous items, superlative price indices are best and unit value indices are biased. The second is the widespread and unwarranted use of price indices for homogeneous items, for which unit value indices are best and superlative price indices are biased. Then there is the “in‐between”: the case of broadly comparable items. This paper examines such issues.

Suggested Citation

  • Mick Silver, 2010. "The Wrongs And Rights Of Unit Value Indices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 206-223, June.
    • Handle: RePEc:bla:revinw:v:56:y:2010:i:s1:p:s206-s223
    DOI: 10.1111/j.1475-4991.2010.00391.x
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    References listed on IDEAS

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    2. David Yoskowitz, 2002. "Price Dispersion and Price Discrimination: Empirical Evidence from a Spot Market for Water," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(3), pages 283-289, May.
    3. Mick Silver, 2009. "An Index Number Formula Problem: The Aggregation of Broadly Comparable items," IMF Working Papers 2009/019, International Monetary Fund.
    4. von der Lippe, Peter, 2007. "Price indices and unit value indices in German foreign trade statistics," MPRA Paper 5525, University Library of Munich, Germany.
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    7. Saul Lach, 2002. "Existence And Persistence Of Price Dispersion: An Empirical Analysis," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 433-444, August.
    8. Silver, Mick & Heravi, Saeed, 2007. "Why elementary price index number formulas differ: Evidence on price dispersion," Journal of Econometrics, Elsevier, vol. 140(2), pages 874-883, October.
    9. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    10. Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
    11. Mick Silver, 2009. "Do Unit Value Export, Import, and Terms-of-Trade Indices Misrepresent Price Indices?," IMF Staff Papers, Palgrave Macmillan, vol. 56(2), pages 297-322, June.
    12. Angermann, Oswald, 1980. "External Terms of Trade of the Federal Republic of Germany Using Differing Methods of Deflation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 26(4), pages 367-385, December.
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