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An Index Number Formula Problem: The Aggregation of Broadly Comparable items
Author:
Mick Silver
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 019
Language:
English
Publication Date:
01 Jan 2009
DOI:
https://doi.org/10.5089/9781451871661.001
ISBN:
9781451871661
ISSN:
1018-5941
Pages:
22
Keywords:
WP; price index; index number; unit value index
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Index number theory informs us that if data on matched prices and quantities are available, a superlative index number formula is best to aggregate heterogeneous items, and a unit value index to aggregate homogeneous ones. The formulas can give very different results. Neglected is the practical case of broadly comparable items. This paper provides a formal analysis as to why such formulas differ and proposes a solution to this index number problem.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund