The Laspeyres bias in the Spanish consumer price index

Javier Ruiz-Castillo, Eduardo Ley and Mario Izquierdo ()

Applied Economics, 2002, vol. 34, issue 18, 2267-2276

Abstract: The CPI compares the cost of acquiring a reference quantity vector at current and base prices. Such reference vector is the vector of mean quantities actually bought by a reference population, whose consumption patterns are investigated during a period τ prior to the index base period 0. This paper shows that unless the price change between these two dates is taken into account, the CPI ceases to be a proper statistical price index of the Laspeyres type. Among several negative consequences, the most important is that this omission produces a bias in the measurement of inflation: the 'Laspeyres bias'. Using Spanish data, the size of the Laspeyres bias is estimated at -0.061% per year, during 1992-1998. The Laspeyres bias in shorter time periods reached -0.122% per year in 1992, and -0.108 in 1997.

Date: 2002
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840210138428 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The laspeyres bias in the Spanish consumer price index
Working Paper: The Laspeyres bias in the Spanish consumer price index
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:taf:applec:v:34:y:2002:i:18:p:2267-2276

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840210138428

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().