Using Engel curves to estimate bias in the Canadian CPI as a cost of living index

Timothy Beatty and Erling Røed Larsen

Canadian Journal of Economics, 2005, vol. 38, issue 2, 482-499

Abstract: Semiparametric Engel curves are used to infer bias in the Canadian CPI as a Cost of Living Index. The budget share of food has long been used as an indicator of welfare. We compare households with the same levels of CPI deflated total expenditure over the period 1978-2000. Differences in the expenditure share of food are attributed to the CPI failing to capture changes in costs of living. We employ a novel econometric approach using a single index penalized linear spline model. Over the period, we find that the CPI overstated changes in the cost of living between 1.33 and 1.86% for the four household types considered.

JEL-codes: C1 D1 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (41)

Downloads: (external link)
https://doi.org/10.1111/j.0008-4085.2005.00289.x (text/html)
access restricted to subscribers

Related works:
Working Paper: USING ENGEL CURVES TO ESTIMATE BIAS IN THE CANADIAN CPI AS A COST OF LIVING INDEX (2004)
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:cje:issued:v:38:y:2005:i:2:p:482-499

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().