Potenziale und Grenzen eines nutzenbasierten ökonomischen Leitbildes für die amtliche Inflationsmessung / What Role Should Economic Reasoning Play in the Compilation of the Official Consumer Price Index?

This paper addresses the question, What role should economic reasoning play in the compilation of the official consumer price index (CPI) ? It is argued that economic theory has developed some extremely helpful techniques such as the economic cost of living index (COLI). However, by contending that the COLI should provide the only conceptual framework for a CPI, too much is expected from it. The COLI’s theoretical and practical limitations require us to find supplementary guidance outside the COLI framework. Furthermore, a consistent, fast, and reliable computational method for a COLI is not yet in sight. Therefore, the CPI must be computed by some sort of statistical price index (SP). For finding an appropriate SP, one can follow a direct and an indirect search strategy. In the direct approach, a SP is regarded as suitable, only if it satisfies a number of basic properties that are considered as indispensable for a meaningful CPI (axiomatic index theory). In the indirect approach, one looks for those SPs that provide a particularly close approximation to a COLI (superlative price index formulas). Advocates of the COLI are natural supporters of the indirect method. Opponents of the COLI lean more towards the direct method. Some regard both approaches as useless. Here it is argued that both approaches provide useful guidance when selecting a SP.