An Index Number Formula Problem: The Aggregation of Broadly Comparable Items

Mick Silver ()

No 09/19, IMF Working Papers from International Monetary Fund

Abstract: Index number theory informs us that if data on matched prices and quantities are available, a superlative index number formula is best to aggregate heterogeneous items, and a unit value index to aggregate homogeneous ones. The formulas can give very different results. Neglected is the practical case of broadly comparable items. This paper provides a formal analysis as to why such formulas differ and proposes a solution to this index number problem.

Keywords: Indexation; Consumer price indexes; Producer price indexes; Economic models (search for similar items in EconPapers)
Date: Written
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