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Application of the Original Price Index Formula to Measuring the CPI’s Commodity Substitution Bias

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  • Jacek Białek

Abstract

This paper examines a possibility to apply the original price index formula to measuring the commodity substitution bias associated with the Consumer Price Index (CPI). Through simulation study the CPI bias values - calculated by using the original price index formula – is compared with those calculated on the basis of some known, superlative price indices.

Suggested Citation

  • Jacek Białek, 2014. "Application of the Original Price Index Formula to Measuring the CPI’s Commodity Substitution Bias," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 15(1), pages 83-96, January.
    • Handle: RePEc:csb:stintr:v:15:y:2014:i:1:p:83-96
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    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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