Is There a Quality Bias in the Canadian CPI? Evidence from Micro Data

Oleksiy Kryvtsov

Staff Working Papers from Bank of Canada

Abstract: Rising consumer prices may reflect shifts by consumers to new higher-priced products, mostly for durable and semi-durable goods. I apply Bils’ (2009) methodology to newly available Canadian consumer price data for non-shelter goods and services to estimate how price increases can be divided between quality growth and price inflation. I find that less than one-third of observed price increases during model changeovers should be attributed to quality growth. This implies overall price inflation close to inflation measured by the official index. I conclude that, according to Bils’ methodology, the quality bias is not an important source of potential mismeasurement of CPI inflation in Canada.

Keywords: Inflation and prices; Potential output (search for similar items in EconPapers)
JEL-codes: E31 M11 O47 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2013
New Economics Papers: this item is included in nep-mac and nep-mon
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Related works:
Journal Article: Is there a quality bias in the Canadian CPI? Evidence from microdata (2016)
Journal Article: Is there a quality bias in the Canadian CPI? Evidence from microdata (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:13-24

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