Stochastic Approach to Index Numbers

E. A. Selvanathan and D.S. Prasada Rao ()
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E. A. Selvanathan: Griffith University

Chapter Chapter 3 in Index Numbers, 1994, pp 47-73 from Palgrave Macmillan

Abstract: Abstract In Chapter 2 we discussed two appraoches to the derivation of index numbers, namely, the ‘functional approach’ and the ‘atomistic approach’ (which encompasses the stochastic and test approaches), and derived several index number formulae using both approaches. The atomistic approach considers the price index as a single statistical measurement of the central tendency of a set of observations (see, Frisch, 1936, for a detailed exposition). On the other hand, the functional approach relates the index numbers to their underlying utility or production function (see Diewert, 1981) within the framework of mathematical relationships.

Keywords: Price Index; Price Relative; Base Period; Index Number; Stochastic Approach (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-23594-0_3

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DOI: 10.1007/978-1-349-23594-0_3

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