An Experimental Component Index for the CPI: From Annual Computer Data to Monthly Data on Other Goods

Tim Erickson and Ariel Pakes

American Economic Review, 2011, vol. 101, issue 5, 1707-38

Abstract: The CPI component indices are obtained from comparing price quotes at a given store in different periods. If we omit comparisons from goods in the store in the initial, but not in the comparison, period we generate a selection bias: goods that exit are disproportionately obsolete goods that have falling prices. Building on Pakes (2003), we explain why standard hedonic predictions for second-period prices of exiting goods do not account for this bias. New hedonic methods are derived, shown to have desirable properties, and are applied to three CPI samples where they generate significant selection corrections. (JEL C43, E31)

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.5.1707 (application/pdf)
http://www.aeaweb.org/aer/data/aug2011/20080921_data.zip dataset accompanying article (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: An Experimental Component Index for the CPI: From Annual Computer Data to Monthly Data on Other Goods (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:101:y:2011:i:5:p:1707-38

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().