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Reconsideration of Weighting and Updating Procedures in the US CPI

Author

Listed:
  • Greenlees John S.

    () (Research Economists, Division of Price and Index Number Research, US Bureau of Labor Statistics, PSB 3105, 2 Massachusetts Avenue, NE, Washington, DC 20212, USA.)

  • Williams Elliot

    () (Research Economists, Division of Price and Index Number Research, US Bureau of Labor Statistics, PSB 3105, 2 Massachusetts Avenue, NE, Washington, DC 20212, USA)

Abstract

In 2002, the US Bureau of Labor Statistics (BLS) introduced a supplemental C-CPI-U employing a superlative formula to provide a closer approximation to a cost-of-living index (COLI). This paper focuses on whether the BLS can improve upon the headline CPI-U’s current biennial weight update process, thereby reducing the CPI-U’s growth rate and bringing the index closer to the C-CPI-U.

Suggested Citation

  • Greenlees John S. & Williams Elliot, 2010. "Reconsideration of Weighting and Updating Procedures in the US CPI," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 741-758, December.
  • Handle: RePEc:jns:jbstat:v:230:y:2010:i:6:p:741-758
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    References listed on IDEAS

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    1. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    2. Christian Broda & David E. Weinstein, 2010. "Product Creation and Destruction: Evidence and Price Implications," American Economic Review, American Economic Association, vol. 100(3), pages 691-723, June.
    3. Robert C. Feenstra & Marshall B. Reinsdorf, 2007. "Should Exact Index Numbers Have Standard Errors? Theory and Application to Asian Growth," NBER Chapters,in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 483-513 National Bureau of Economic Research, Inc.
    4. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    5. Sato, Kazuo, 1976. "The Ideal Log-Change Index Number," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 223-228, May.
    6. Elliot D. Williams, 2006. "The Effects of Rounding on the Consumer Price Index," Working Papers 397, U.S. Bureau of Labor Statistics.
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    Cited by:

    1. Paul Armknecht & Mick Silver, 2014. "Post-Laspeyres: The Case for a New Formula for Compiling Consumer Price Indexes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 225-244, June.

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