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Econometric Perspectives on Economic Measurement

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  • Adam Gorajek

    (Reserve Bank of Australia)

Abstract

It turns out that price index functions share a basic interpretation; practically all of them measure a change in some average of quality-adjusted prices. The different options are distinguished by their choice of average, their definition of quality, and their stance on what I label 'equal interest'. This new perspective updates the so-called stochastic approach to choosing index functions. It also offers new avenues to understand and tackle measurement problems. I discuss three examples.

Suggested Citation

  • Adam Gorajek, 2018. "Econometric Perspectives on Economic Measurement," RBA Research Discussion Papers rdp2018-08, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp2018-08
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    File URL: https://www.rba.gov.au/publications/rdp/2018/pdf/rdp2018-08.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gholamreza Hajargasht, 2022. "Reliability of Ideal Indexes," Papers 2210.13684, arXiv.org.
    2. Diewert, Erwin, 2019. "Quality Adjustment and Hedonics: A Unified Approach," Microeconomics.ca working papers erwin_diewert-2019-2, Vancouver School of Economics, revised 14 Mar 2019.
    3. Adam Gorajek, 2019. "The Well-meaning Economist," RBA Research Discussion Papers rdp2019-08, Reserve Bank of Australia.

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    More about this item

    Keywords

    macroeconomic data; index number; stochastic approach; hedonic price index;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

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