IDEAS home Printed from
   My bibliography  Save this article

The inadequacy of cost of living indices based on subjective preferences: an ethical and methodological critique


  • Eithne Murphy
  • Eoghan Garvey


In this paper we argue that there is scant justification for replacing the traditional fixed-basket Laspeyres price index with so called 'true cost of living indices'. We begin with a discussion of the possible explanations for some empirical results for inflation found for different social groups in Ireland in the late 1990s. Our arguments concerning appropriate inflation indices are primarily ethical and are not dependent on these results being interpreted in a non-neoclassical vein. They do however gain extra force if one accepts non-neoclassical explanations for the empirical results. We go on to draw conclusions as to how best to measure the welfare effects of changes in the price of goods. This links in to the broader debate regarding objective versus subjective measures of welfare.

Suggested Citation

  • Eithne Murphy & Eoghan Garvey, 2008. "The inadequacy of cost of living indices based on subjective preferences: an ethical and methodological critique," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(6), pages 745-754.
  • Handle: RePEc:taf:irapec:v:22:y:2008:i:6:p:745-754
    DOI: 10.1080/02692170802407734

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


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

    Cited by:

    1. Jason Loughrey & Cathal O’Donoghue, 2012. "The Welfare Impact of Price Changes on Household Welfare and Inequality 1999-2011," The Economic and Social Review, Economic and Social Studies, vol. 43(1), pages 31-66.

    More about this item


    cost of living indices; welfare;


    Access and download statistics


    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:taf:irapec:v:22:y:2008:i:6:p:745-754. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.