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An Alternative Decomposition Of The Fisher Index

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  • Hallerbach, W.G.P.M.

Abstract

Aside from the aggregated information provided by price and quantity indexes, there is growing interest in index decompositions that reveal the contribution of each index component to overall index change. In this paper, we derive a “natural” decomposition of the Fisher price index that is directly implied by its linear homogeneity in price relatives. The proposed “Euler” weights not only indicate the total contribution of each component to total index change but also reveal which component had the highest or lowest marginal impact. Our results can readily be generalized to any index that satisfies the linear homogeneity property.

Suggested Citation

  • Hallerbach, W.G.P.M., 2004. "An Alternative Decomposition Of The Fisher Index," ERIM Report Series Research in Management ERS-2004-022-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:1220
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    References listed on IDEAS

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    1. Balk, Bert M., 2004. "Decompositions of Fisher indexes," Economics Letters, Elsevier, vol. 82(1), pages 107-113, January.
    2. Dumagan, Jesus C., 2002. "Comparing the superlative Tornqvist and Fisher ideal indexes," Economics Letters, Elsevier, vol. 76(2), pages 251-258, July.
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    Cited by:

    1. Choi, Ki-Hong & Ang, B.W., 2012. "Attribution of changes in Divisia real energy intensity index — An extension to index decomposition analysis," Energy Economics, Elsevier, vol. 34(1), pages 171-176.
    2. Su, Bin & Ang, B.W., 2014. "Attribution of changes in the generalized Fisher index with application to embodied emission studies," Energy, Elsevier, vol. 69(C), pages 778-786.
    3. Xiao, Hao & Sun, Ke-Juan & Bi, Hui-Min & Meng, Bo, 2021. "Attribution of changes in an intensity index," Energy, Elsevier, vol. 216(C).
    4. Daniel Bunting & Kevin J. Fox, 2014. "The Impact of Quarantine Policies on the Quality of Imports," Discussion Papers 2014-01, School of Economics, The University of New South Wales.

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    More about this item

    Keywords

    Fisher index; besliskunde; decomposition; linear homogeneity;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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