The Consumer Price Index: Recent Developments

Walter Diewert

Economics working papers from Vancouver School of Economics

Abstract: The 2004 International Labour Office Consumer Price Index Manual: Theory and Practice summarized the state of the art for constructing Consumer Price Indexes (CPIs) at that time. In the intervening decade, there have been some significant new developments which are reviewed in this paper. The CPI Manual recommended the use of chained superlative indexes for a month to month CPI. However, subsequent experience with the use of monthly scanner data has shown that a significant chain drift problem can occur. The paper explains the nature of the problem and reviews possible solutions to overcome the problem. The paper also describes the recently developed Time Dummy Product method for constructing elementary index numbers (indexes at lower levels of aggregation where only price information is available).

Keywords: Consumer Price Indexes; superlative indexes; chain drift; scanner data; Time Product Dummy method; GEKS method for making international comparisons; R (search for similar items in EconPapers)
JEL-codes: C43 E31 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2013-10-24, Revised 2013-10-24
New Economics Papers: this item is included in nep-mac and nep-mkt
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:erwin_diewert-2013-45

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