Why Elementary Price Index Number Formulas Differ : Price Dispersion and Product Heterogeneity.

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Bibliographic Details
Imprint:	International Monetary Fund 2006.
Description:	1 online resource (18 pages).
Language:	English
Series:	IMF working paper ; WP/06/174 IMF working paper ; WP/06/174.
Subject:	Consumer price indexes. Price indexes. Consumer price indexes. Price indexes.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12500733

Hidden Bibliographic Details
ISBN:	128253131X 9781282531314 9781451987034 145198703X
Notes:	Includes bibliographical references.
Summary:	The Consumer Price Index Manual (2004) provides guidelines for aggregation formulas that are promulgated at IMF training courses and technical assistance missions. This paper develops elementary level aggregation theory to better inform users and compilers. Most countries use either the Dutot or Jevons index formula. These formulas generally give different results; advice on choice of formula matters. Using an approach based on sample estimators, and an illustration based on scanner data, the paper shows how differences in these formulas can be explained by changes in price dispersion and, in turn, by product heterogeneity. Implications for choice of formula are considered.

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