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Statistical Capacity Building of Official Statisticians in Practice: Case of the Consumer Price Index

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  • Deutsch Tomi

    (University of Ljubljana, Faculty of Economics, Kardeljeva ploščad 17, 1000 Ljubljana, Slovenia)

Abstract

This article focuses on the issue of statistical capacity building of official statisticians using the case of the consumer price index (CPI) as an illustrative example. Although used for indexation of salaries, pensions, and social welfare benefits, but also as an approximation of the general inflation rate, there are several unresolved methodological issues associated with CPI’s calculation. Apart from the choice among two alternative concepts, the challenge of how to include owner-occupied housing (OOH) in CPI has also not been adequately resolved yet. Analysis in the article is based on Slovenian data. The results show that accuracy of the CPI significantly improves if it is calculated using one of the superlative and symmetric formulas, and that it makes sense to include OOH in CPI using the total acquisitions approach. The analysis further indicates that the choice of the index formula for calculating CPI has a much greater impact on the CPI value than inclusion of OOH. Academic research findings such as these should not remain unknown to the wide professional community of official statisticians. Formal channels for knowledge transfer from academia to official statistics providers should be established to facilitate continuous statistical capacity building of official statisticians.

Suggested Citation

  • Deutsch Tomi, 2016. "Statistical Capacity Building of Official Statisticians in Practice: Case of the Consumer Price Index," Journal of Official Statistics, Paradigm, vol. 32(4), pages 827-848, December.
    • Handle: RePEc:vrs:offsta:v:32:y:2016:i:4:p:827-848:n:5
    DOI: 10.1515/jos-2016-0043
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    References listed on IDEAS

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    1. Boris Cournède, 2005. "House Prices and Inflation in the Euro Area," OECD Economics Department Working Papers 450, OECD Publishing.
    2. McCarthy, Colm, 2007. "Owner-Occupied Housing Costs and Bias in the Consumer Price Index," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2007(3-Autumn), pages 83-88.
    3. W. Erwin Diewert, 2002. "Harmonized Indexes of Consumer Prices: Their Conceptual Foundations," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(4), pages 547-637, December.
    4. repec:wbk:wbpubs:17280 is not listed on IDEAS
    5. 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.
    6. Colm McCarthy, 2007. "Owner-occupied housing costs and bias in the Irish Consumer Price Index," Working Papers 200707, School of Economics, University College Dublin.
    7. Kurz, Claudia & Hoffmann, Johannes, 2004. "A rental-equivalence index for owner-occupied housing in West Germany 1985 to 1998," Discussion Paper Series 1: Economic Studies 2004,08, Deutsche Bundesbank.
    8. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
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