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23
Harmonized Indexes of Consumer Prices: Their Conceptual Foundations
, 2001
"... The European Union’s Harmonized Index of Consumer Prices (HICP) is the single most important indicator of inflation used by the European Central Bank. This paper investigates the methodological foundations of the HICP. Sections 2 to 4 of the paper look at the theory of inflation indexes that could b ..."
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Cited by 37 (5 self)
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The European Union’s Harmonized Index of Consumer Prices (HICP) is the single most important indicator of inflation used by the European Central Bank. This paper investigates the methodological foundations of the HICP. Sections 2 to 4 of the paper look at the theory of inflation indexes that could be used as central bank target indexes of inflation. A Consumer Price Index (CPI) emerges as perhaps the most useful target index. Section 5 addresses the technical details involved in constructing a CPI. Four different approaches to index number theory are reviewed and the “best ” index number formula from each perspective is determined. Section 6 looks at the methodology of the HICP in the light of the previous sections. Section 7 looks at some of the difficult measurement problems that must be addressed in a CPI or an HICP. These problems include the treatment of quality change, substitution or representativity bias, chained versus fixed base indexes, the choice of formula at the lowest level of aggregation and the treatment of owner occupied housing and seasonal commodities.
2005): “Using Engel curves to estimate bias in the Canadian CPI as a cost of living index
 Canadian Journal of Economics
"... Semiparametric Engel curves are used to infer bias in the Canadian CPI as a Cost of Living Index. The budget share of food has long been used as an indicator of welfare. We compare households with the same levels of CPI deflated total expenditure over the period 19782000. Differences in the expend ..."
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Semiparametric Engel curves are used to infer bias in the Canadian CPI as a Cost of Living Index. The budget share of food has long been used as an indicator of welfare. We compare households with the same levels of CPI deflated total expenditure over the period 19782000. Differences in the expenditure share of food are attributed to the CPI failing to capture changes in wealth. We employ a novel econometric approach using a single index penalized linear spline model. We find that the CPI overstated changes in the cost of living by an average of 1.81 % and 0.785 % for single and two adult households respectively.
The Quadratic Approximation Lemma and Decompositions of Superlative Indexes
 Journal of Economic and Social Measurement
, 2002
"... Abstract It was shown in 1976 that a difference in a quadratic function of N variables evaluated at two points is exactly equal to the sum of the arithmetic average of the first order partial derivatives of the function evaluated at the two points times the differences in the independent variables. ..."
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Abstract It was shown in 1976 that a difference in a quadratic function of N variables evaluated at two points is exactly equal to the sum of the arithmetic average of the first order partial derivatives of the function evaluated at the two points times the differences in the independent variables. In the present paper, this result is generalized and the resulting generalized quadratic approximation lemma is used to establish all of the superlative index number formulae that were derived in Keywords Superlative index, quadratic approximations, percentage change decompositions, price indexes, quantity indexes, Fisher ideal index.
2010. “Comparing the Consistency of Price Parities for Regions of the U.S. in an Economic Approach Framework.” Paper presented at the 31st General Conference of IARIW
"... This work was made possible by an interagency agreement and the collaboration of the Bureau of Labor Statistics (BLS), the Census Bureau, and the Bureau of Economic Analysis (BEA). The agreements provided access to the microdata in the CPI (Consumer Price Index) survey and in the ACS (American Comm ..."
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Cited by 2 (0 self)
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This work was made possible by an interagency agreement and the collaboration of the Bureau of Labor Statistics (BLS), the Census Bureau, and the Bureau of Economic Analysis (BEA). The agreements provided access to the microdata in the CPI (Consumer Price Index) survey and in the ACS (American Community Survey). We are grateful to the BLS Division of Prices and Index
1 Some Issues Concerning Index Number Theory
"... The past quarter century has seen a remarkable amount of progress in both the theory and practice of index number theory and the closely related problems associated with the measurement of output, input and productivity. In section 2 below, we will review some ..."
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Cited by 1 (0 self)
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The past quarter century has seen a remarkable amount of progress in both the theory and practice of index number theory and the closely related problems associated with the measurement of output, input and productivity. In section 2 below, we will review some
1 The Ottawa Group after Ten Meetings: Future Priorities
"... The paper briefly reviews the accomplishments of the Ottawa Group on the occasion of its tenth meeting and then goes on to list ten problem areas in price measurement that have not been completely resolved and hence should be a focus of future meetings. The ten problem areas are: (1) the constructio ..."
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The paper briefly reviews the accomplishments of the Ottawa Group on the occasion of its tenth meeting and then goes on to list ten problem areas in price measurement that have not been completely resolved and hence should be a focus of future meetings. The ten problem areas are: (1) the construction of elementary indexes when price and quantity data are available; (2) the construction of user costs for capital inputs; (3) the quality adjustment of prices; (4) the construction of price indexes for owner occupied housing; (5) problems associated with difficult to measure services; (6) the treatment of prices associated with household production; (7) the measurement of export and import prices in the production accounts of the System of National Accounts; (8) the treatment of seasonal products; (9) the measurement of core inflation and (10) the treatment of new
HOUSEHOLD PRODUCTION, LEISURE AND LIVING STANDARDS
"... Abstract Household production is an important nonmarket activity and the empirical literature has come up with three main methods towards valuing household production. We follow the literature spawned by ..."
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Abstract Household production is an important nonmarket activity and the empirical literature has come up with three main methods towards valuing household production. We follow the literature spawned by
and Other Statistical Issues in Developing CostofLiving Indexes, under the chairmanship of
, 2008
"... ..."
CONFERENCE OF EUROPEAN STATISTICIANS Joint ECE/ILO Meeting
, 2001
"... The U.S. Consumer Price Index (CPI) has long been, and remains, an index that is guided by the economic theory of the costofliving index (COLI). In this paper I discuss the operational implications of this link between the CPI and the COLI objective. The purpose is not to provide a new derivation ..."
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The U.S. Consumer Price Index (CPI) has long been, and remains, an index that is guided by the economic theory of the costofliving index (COLI). In this paper I discuss the operational implications of this link between the CPI and the COLI objective. The purpose is not to provide a new derivation and explication of the theoretical framework of the CPI. Rather, it is to review how the COLI concept has played a role in past BLS decisions and in the current BLS view with respect to difficult methodological issues.
Reserve System. Any errors or omissions are the responsibility of the authors. Title: Inflation Inequality in the United States
, 2003
"... This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in the paper are those of the authors and are not necessarily ..."
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This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in the paper are those of the authors and are not necessarily