Aggregate Indices and Their Corresponding Elementary Indices

Mehrhoff Jens ()
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Mehrhoff Jens: Statistics Department and Research Centre, Deutsche Bundesbank,Wilhelm- Epstein-Strasse 14, 60431 Frankfurt a.M., Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2010, vol. 230, issue 6, 709-725

Abstract: “Which index formula at the elementary level, where no expenditure share weights are available, corresponds to a desired aggregate index?” To answer this question, this paper develops a statistical approach. It proposes a theoretical framework which makes it possible to achieve numerical equivalence of an elementary index with the Laspeyres, Paasche or Fisher price index. Depending on the price elasticity, different elementary indices should be applied to different groups of goods in order to approach the desired aggregate index as closely as possible. Furthermore, the new statistical approach assures internal consistency between price and volume measurement.

Keywords: Generalised mean; quadratic mean; log-normal distribution; partial adjustment model; price elasticity; internal consistency; Generalised mean; quadratic mean; log-normal distribution; partial adjustment model; price elasticity; internal consistency (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:230:y:2010:i:6:p:709-725

DOI: 10.1515/jbnst-2010-0607

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