An Index Number Formula Problem; The Aggregation of Broadly Comparable items
Index number theory informs us that if data on matched prices and quantities are available, a superlative index number formula is best to aggregate heterogeneous items, and a unit value index to aggregate homogeneous ones. The formulas can give very different results. Neglected is the practical case of broadly comparable items. This paper provides a formal analysis as to why such formulas differ and proposes a solution to this index number problem.
|Date of creation:||01 Jan 2009|
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- Jerry Hausman & Ephraim Leibtag, 2009.
"CPI Bias from Supercenters: Does the BLS Know that Wal-Mart Exists?,"
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National Bureau of Economic Research, Inc.
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