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Does the Turkish Statistical Institute Understate Inflation Figures after It Stopped Disclosure Item Price Details in the Inflation Basket?

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  • Prof. Dr. Aydın Çelen

Abstract

Purpose: The main objective of this research was to detect whether Turkish Statistical Institute (TURKSTAT) started to understate inflation figures as alleged after it stopped announcing detailed item prices in the inflation basket. Methodology: The study started with a simple Before-After analysis and then expanded to an application of the more comprehensive Difference-in-Differences (DiD) method. Inflation figures announced by ITO (Ä°stanbul Chamber of Commerce) and ENAG (Inflation Research Group) were used as control group in DiD analysis. The study used monthly Consumer Price Index (CPI) data between November 2021 and January 2023. Data has been collected from the webpage of TURKSTAT, ITO and ENAG. Findings: The fact that the price details in the inflation basket were not disclosed did not have a statistically significant effect on the difference between TURKSTAT figures and ITO and ENAG figures. Therefore, we could not reach a finding that supports the views and criticisms that TURKSTAT may understate inflation by not publishing the basket details. Recommendation: Although it has been shown that covering up the price details in the inflation basket does not have a statistically significant dropping effect on TURKSTAT figures compared to ITO and ENAG figures, disclosing price details to the public, as in previous years, may increase transparency and trust in the institution.

Suggested Citation

  • Prof. Dr. Aydın Çelen, 2023. "Does the Turkish Statistical Institute Understate Inflation Figures after It Stopped Disclosure Item Price Details in the Inflation Basket?," American Journal of Finance, AJPO, vol. 8(1), pages 46-59.
    • Handle: RePEc:bfy:ojtajf:v:8:y:2023:i:1:p:46-59:id:1483
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