Democratic, Plutocratic and Social Weights in Price Indexes
This paper introduces social considerations into the calculation of the price index. To this purpose, recourse is made to the concept of distributional characteristic. It is shown how an aggregate price index can be expressed as a weighted average of commodity-specific prices, with weights that depend on both the aggregate share of consumption and the way in which consumption is distributed across households. The proposed index provides a complementary basis for the analysis of the impact of inflation and for the calculation of its social value.
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- Eduardo Ley, 2002. "On Plutocratic and Democratic CPIs," Economics Bulletin, AccessEcon, vol. 4(3), pages 1-5.
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- Navajas, Fernando & Porto, Alberto, 1994. "Budget shares, distributional characteristics and the direction of tax reform," Economics Letters, Elsevier, vol. 45(4), pages 475-479, August.
- Eduardo Ley, 2001.
"Whose Inflation? A Characterization of the CPI Plutocratic Gap,"
0110001, EconWPA, revised 20 Oct 2001.
- Eduardo Ley, 2005. "Whose inflation? A characterization of the CPI plutocratic gap," Oxford Economic Papers, Oxford University Press, vol. 57(4), pages 634-646, October.
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