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Weekly versus Monthly Unit Value Price Indexes

Author

Listed:
  • W. Erwin Diewert

    (University of British Columbia and UNSW)

  • Kevin J. Fox

    () (School of Economics, UNSW Business School, UNSW)

  • Jan de Haan

    (Statistics Netherlands and Delft University of Technology)

Abstract

A previously overlooked source of potential bias in the Consumer Price Index (CPI) is described. We find that unit value (average) prices, commonly used for construction of the CPI should be constructed over the same period as the index to be constructed, rather than over an incomplete sub-period. The latter approach can lead to an upward bias in the CPI.

Suggested Citation

  • W. Erwin Diewert & Kevin J. Fox & Jan de Haan, 2015. "Weekly versus Monthly Unit Value Price Indexes," Discussion Papers 2015-15, School of Economics, The University of New South Wales.
  • Handle: RePEc:swe:wpaper:2015-15
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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2015-15.pdf
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    References listed on IDEAS

    as
    1. Fox, Kevin J. & Syed, Iqbal A., 2016. "Price discounts and the measurement of inflation," Journal of Econometrics, Elsevier, vol. 191(2), pages 398-406.
    2. Mick Silver, 2009. "An Index Number Formula Problem; The Aggregation of Broadly Comparable items," IMF Working Papers 09/19, International Monetary Fund.
    3. Reinsdorf, Marshall B, 1999. "Using Scanner Data to Construct CPI Basic Component Indexes," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 152-160, April.
    4. Lorraine Ivancic & Kevin J. Fox, 2013. "Understanding Price Variation Across Stores and Supermarket Chains: Some Implications for CPI Aggregation Methods," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 629-647, December.
    5. Mick Silver, 2010. "The Wrongs And Rights Of Unit Value Indices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 206-223, June.
    6. W. Erwin Diewert, 1995. "Axiomatic and Economic Approaches to Elementary Price Indexes," NBER Working Papers 5104, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Fox, Kevin J. & Syed, Iqbal A., 2016. "Price discounts and the measurement of inflation," Journal of Econometrics, Elsevier, vol. 191(2), pages 398-406.

    More about this item

    Keywords

    Elementary price indexes; aggregation; inflation;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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