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Weekly versus Monthly Unit Value Price Indexes

Author

Listed:
  • de Haan, Jan
  • Diewert, W. Erwin
  • Fox, Kevin J.

Abstract

A new source of potential bias in the Consumer Price Index (CPI) is described. We find that unit value (average) prices, commonly used for construction of the CPI should be constructed over the same period as the index to be constructed, rather than over an incomplete sub-period. The latter approach can lead to an upward bias in the CPI.

Suggested Citation

  • de Haan, Jan & Diewert, W. Erwin & Fox, Kevin J., 2015. "Weekly versus Monthly Unit Value Price Indexes," Economics working papers erwin_diewert-2015-15, Vancouver School of Economics, revised 20 Jul 2015.
    • Handle: RePEc:ubc:bricol:erwin_diewert-2015-15
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    File URL: http://econ.sites.olt.ubc.ca/files/2015/07/pdf_paper_erwin-diewert-15-03Weeklyversusmonthly.pdf
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    References listed on IDEAS

    as
    1. Fox, Kevin J. & Syed, Iqbal A., 2016. "Price discounts and the measurement of inflation," Journal of Econometrics, Elsevier, vol. 191(2), pages 398-406.
    2. Mick Silver, 2010. "The Wrongs And Rights Of Unit Value Indices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 206-223, June.
    3. Mick Silver, 2009. "An Index Number Formula Problem: The Aggregation of Broadly Comparable items," IMF Working Papers 2009/019, International Monetary Fund.
    4. W. Erwin Diewert, 1995. "Axiomatic and Economic Approaches to Elementary Price Indexes," NBER Working Papers 5104, National Bureau of Economic Research, Inc.
    5. Reinsdorf, Marshall B, 1999. "Using Scanner Data to Construct CPI Basic Component Indexes," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 152-160, April.
    6. Lorraine Ivancic & Kevin J. Fox, 2013. "Understanding Price Variation Across Stores and Supermarket Chains: Some Implications for CPI Aggregation Methods," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 629-647, December.
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    Cited by:

    1. Fox, Kevin J. & Syed, Iqbal A., 2016. "Price discounts and the measurement of inflation," Journal of Econometrics, Elsevier, vol. 191(2), pages 398-406.
    2. Kevin J, Fox. & Iqbal A. Syed, 2016. "Price Discounts and the Measurement of Inflation: Further Results," Discussion Papers 2016-05, School of Economics, The University of New South Wales.

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    More about this item

    Keywords

    Elementary price indexes; aggregation; inflation.;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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