Why elementary price index number formulas differ
Subtitle: price dispersion and product heterigeneity
By: prepared by Mick Silver and Saeed Heravi.
Contributors: Heravi, Saeed.; International Monetary Fund. Statistics Dept.
Series: IMF working paper -- WP/06/174
Publisher: International Monetary Fund, Statistics Dept.
Published: 2006
Place of publication: [Washington, D.C.]
Language: eng
Number of pages: 16
Subjects: Consumer price indexes.; Econometric models.
Description: 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.
Notes: Caption title.

"July 2006."

Includes bibliographical references (p. 14-15).

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