Scanner Data and the Construction of Inter-Regional Price Indexes

Chihiro Shimizu, Walter Diewert, Naohito Abe and Akiyuki Tonogi

No e211, Working Papers from Tokyo Center for Economic Research

Abstract: The paper uses monthly scanner data on purchases of rice in six Japanese Prefectures over the 24 months in the years 2021 and 2022 in order to calculate alternative price indexes that are free from chain drift. The paper also attempts to measure the welfare effects of differing product availability across the six prefectures. In order to eliminate the chain drift problem, the following multilateral indexes were computed: GEKS, Geary-Khamis and Weighted Time Product Dummy Hedonic price indexes. Chain drift can also be eliminated by estimating purchaser preferences using consumer demand theory. Thus the paper uses the Japanese rice data to estimate linear preferences, CES preferences and Konus Byushgens Fisher preferences (with a rank one substitution matrix). Feenstra (1994) worked out a method for measuring the gains (or losses) of utility from new and disappearing products and his method is adapted to measuring the welfare effects of differing degrees of product availability across the Prefectures.

Pages: 42 pages
Date: 2025-02
New Economics Papers: this item is included in nep-inv and nep-upt
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