Notes on Unit Value Index Bias

Walter Diewert and Peter von der Lippe

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2010, vol. 230, issue 6, 690-708

Abstract: It is often the case that the value of a number of somewhat similar units (e. g., automobiles of a certain general type) is divided by the number of units in order to form a unit value price and these unit value prices are compared over two periods in order to form a unit value price index. This unit value price index or Drobisch price index can then be compared with other standard index number formulae and the bias in the index can be determined. The present paper presents most of the known results on this bias (and derives some new ones) in a coherent framework using a simple identity from the statistics literature. A related question first considered by Párniczky (1974) is also considered: does disaggregation of a unit value into more homogeneous subgroups reduce the unit value bias? The answer seems to be: probably yes.

Keywords: Price indexes; unit value indexes; unit values; bias; Bortkiewicz; Drobisch; Paasche; Laspeyres; Fisher; Párniczky; Balk; von der Lippe; Price indexes; unit value indexes; unit values; bias; Bortkiewicz; Drobisch; Paasche; Laspeyres; Fisher; Párniczky; Balk; von der Lippe (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:230:y:2010:i:6:p:690-708

DOI: 10.1515/jbnst-2010-0606

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