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Aggregate Indices and Their Corresponding Elementary Indices

Author

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  • Mehrhoff Jens

    (Statistics Department and Research Centre, Deutsche Bundesbank,Wilhelm- Epstein-Strasse 14, 60431 Frankfurt a.M., Germany)

Abstract

“Which index formula at the elementary level, where no expenditure share weights are available, corresponds to a desired aggregate index?” To answer this question, this paper develops a statistical approach. It proposes a theoretical framework which makes it possible to achieve numerical equivalence of an elementary index with the Laspeyres, Paasche or Fisher price index. Depending on the price elasticity, different elementary indices should be applied to different groups of goods in order to approach the desired aggregate index as closely as possible. Furthermore, the new statistical approach assures internal consistency between price and volume measurement.

Suggested Citation

  • Mehrhoff Jens, 2010. "Aggregate Indices and Their Corresponding Elementary Indices," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 709-725, December.
    • Handle: RePEc:jns:jbstat:v:230:y:2010:i:6:p:709-725
    DOI: 10.1515/jbnst-2010-0607
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    References listed on IDEAS

    as
    1. Balk,Bert M., 2012. "Price and Quantity Index Numbers," Cambridge Books, Cambridge University Press, number 9781107404960, January.
    2. R. G. D. Allen, 1975. "Index Numbers in Theory and Practice," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-02312-7.
    3. Michael J. Boskin, 1998. "Consumer Prices, the Consumer Price Index, and the Cost of Living," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 3-26, Winter.
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