The COVID-19 inflation weighting in Israel

Jonathan Benchimol, Itamar Caspi and Yuval Levin

EconStor Open Access Articles and Book Chapters, 2021, vol. 19, issue 1, 5-14

Abstract: Significant shifts in the composition of consumer spending as a result of the COVID-19 crisis can complicate the interpretation of official inflation data, which are calculated by the Central Bureau of Statistics (CBS) based on a fixed basket of goods. We focus on Israel as a country that experienced three lockdowns, additional restrictions that significantly changed consumer behavior, and a successful vaccination campaign that has led to the lifting of most of these restrictions. We use credit card spending data to construct a consumption basket of goods representing the composition of household consumption during the COVID-19 period. We use this synthetic COVID-19 basket to calculate the adjusted inflation rate that should prevail during the pandemic period. We find that the differences between COVID-19-adjusted and CBS (unadjusted) inflation measures are transitory. Only the contribution of certain goods and services, particularly housing and transportation, to inflation changed significantly, especially during the first and second lockdowns. Although lockdowns and restrictions in developed countries created a significant bias in inflation weighting, the inflation bias remained unexpectedly small and transitory during the COVID-19 period in Israel.

Keywords: Consumer expenditures; Consumer price inflation; Consumer behavior; Coronavirus pandemic; Vaccination; Price index; Spending weights; Pandemics (search for similar items in EconPapers)
JEL-codes: C43 D12 E21 E31 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/323610/1/inflation-weighting-covid.pdf (application/pdf)

Related works:
Working Paper: The COVID-19 Inflation Weighting in Israel (2025)
Journal Article: The COVID-19 Inflation Weighting in Israel (2022)
Working Paper: The COVID-19 inflation weighting in Israel (2022)
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:zbw:espost:323610

Access Statistics for this article

More articles in EconStor Open Access Articles and Book Chapters from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().