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Outlet types and the Canadian Consumer Price Index

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  • Alan G. White

Abstract

Recent phenomenal growth in popularity of large warehouse/discount stores has important implications for price measurement. Consumer substitution to such outlets could produce a bias in consumer price indexes (CPIs), which may be exacerbated by unrepresentative sampling and discount outlets’ apparent slower rates of price increases. It is shown that in 1990‐96 unit value indexes rose at a lower rate than the corresponding Canadian CPI subaggregate indexes for other household equipment, non‐prescribed medicines, and audio equipment, and biases arising from unrepresentative sampling and differential rates of price increases across outlets have resulted in an additional overstatement for these subaggregates. La croissance dans la popularité des magasins/entrepôts à forts escomptes au cours des der;chnières années a été fort importante et a eu des effets importants sur la mesure des prix. Le comportement du consommateur qui choisit ces magasins pourrait entraîner un biais dans la mesure des indices de prix à la consommation. Un échantillonage non représentatif et le fait que ces magasins semblent avoir des augmentations de prix plus faibles dans le temps peuvent biaiser encore plus les indices. Cette recherche montre que entre 1990 et 1996 les indices de la valeur unitaire ont cru à un taux plus faible que les indices correspondant de prix à la consommation pour des sous‐agrégats comme autre ´equipement des ménages, médicaments non‐prescrit, et ´equipement audio. Il semble que les biais engendrés par les différentiels de croissance des prix entre magasins et un échantillonnage non représentatif se soient traduits par un biais à la hausse dans ces sous‐agrégats

Suggested Citation

  • Alan G. White, 2000. "Outlet types and the Canadian Consumer Price Index," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(2), pages 488-505, May.
  • Handle: RePEc:wly:canjec:v:33:y:2000:i:2:p:488-505
    DOI: 10.1111/0008-4085.00025
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    Cited by:

    1. Timothy K.M. Beatty & Erling Røed Larsen, 2005. "Using Engel curves to estimate bias in the Canadian CPI as a cost of living index," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(2), pages 482-499, May.
    2. John S. Greenlees & Robert McClelland, 2011. "New Evidence on Outlet Substitution Effects in Consumer Price Index Data," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 632-646, May.
    3. Andreas Benedictow & Pål Boug, 2017. "Calculating the real return on a sovereign wealth fund," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(2), pages 571-594, May.
    4. Grenier, Gilles, 2003. "En quelle année vaut-il mieux être né? Les revenus des hommes et des femmes au Canada pendant un quart de siècle," L'Actualité Economique, Société Canadienne de Science Economique, vol. 79(3), pages 245-276, Septembre.
    5. Pål Boug, 2017. "Exact and inexact decompositions of international price indices," Discussion Papers 868, Statistics Norway, Research Department.
    6. Andreas Benedictow & Pål Boug, 2022. "Exact and inexact decompositions of trade price indices," Empirical Economics, Springer, vol. 62(4), pages 1981-1994, April.

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