IDEAS home Printed from https://ideas.repec.org/p/uwa/wpaper/18-05.html
   My bibliography  Save this paper

Divisia And Frisch Are Friends

Author

Listed:
  • Kenneth W. Clements

    (Business School, The University of Western Australia)

  • Jiawei Si

    (Business School, The University of Western Australia)

Abstract

Divisia indexes and the less-well-known Frisch counterparts both involve weighted logarithmic changes of prices/quantities. This paper shows how they can be used in tandem to understand interesting aspects of consumer behaviour. The indexes can be used for measurement of quality and its price; the estimation of the income elasticity of the marginal utility of income, which is related to the overall degree of substitution among goods in the consumer’s basket; and for the analysis of the bias in the consumer price index due to the neglect of substitution effects. In this sense, Divisia and Frisch (indexes) are friends.

Suggested Citation

  • Kenneth W. Clements & Jiawei Si, 2018. "Divisia And Frisch Are Friends," Economics Discussion / Working Papers 18-05, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:18-05
    Note: MD5 = b11b37dd9245c841ca0d623fe7a76916
    as

    Download full text from publisher

    File URL: https://ecompapers.biz.uwa.edu.au/paper/PDF%20of%20Discussion%20Papers/2018/DP%2018.05_Clements%20and%20Si.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Divisia index numbers; Frisch index numbers; measuring quality; the income flexibility; the CPI bias;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwa:wpaper:18-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sam Tang (email available below). General contact details of provider: https://edirc.repec.org/data/deuwaau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.