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Lowe and Cobb-Douglas Consumer Price Indices and their Substitution Bias

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Published/Copyright: March 16, 2016
Jahrbücher für Nationalökonomie und Statistik
From the journal Jahrbücher für Nationalökonomie und Statistik Volume 230 Issue 6

Summary

Catching the effect of substitution behaviour in a Consumer Price Index (CPI) as good as possible is a goal pursued by statistical agencies throughout the world. The difference between a CPI and a certain target cost-of-living index is called substitution bias. Balk and Diewert (2003) considered the substitution bias of a Lowe Consumer Price Index; see also CPI Manual (2004: Chapter 17). The present paper considers the substitution bias of a Cobb-Douglas (or Geometric Young) CPI, and compares the two price indices with respect to their substitution bias. It appears difficult to draw a clear-cut conclusion.

Keywords: Index number; cost-of-living index; Lowe index; Cobb-Douglas index; Geometric Young index
Online erschienen: 2016-3-16
Erschienen im Druck: 2010-12-1

© 2010 by Lucius & Lucius, Stuttgart

Articles in the same Issue

  1. Titelei
  2. Inhalt des 230. Bandes
  3. Die Gutachter zum 230. Jahrgang der Jahrbücher für Nationalökonomie und Statistik (01.01.2010 bis 31.12.2010)
  4. Inhalt / Contents
  5. Introduction to the Special Issue on Index Number Theory and Price Statistics
  6. Abhandlungen / Original Papers
  7. Drobisch’s Legacy to Price Statistics
  8. Notes on Unit Value Index Bias
  9. Aggregate Indices and Their Corresponding Elementary Indices
  10. Lowe and Cobb-Douglas Consumer Price Indices and their Substitution Bias
  11. Reconsideration of Weighting and Updating Procedures in the US CPI
  12. User Costs versus Waiting Services and Depreciation in a Model of Production
  13. Hedonic Price Indexes: A Comparison of Imputation, Time Dummy and ’Re-Pricing’ Methods
  14. Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures
  15. Regional Consumer Price Differences Within Germany
  16. Buchbesprechungen / Book Reviews
https://doi.org/10.1515/jbnst-2010-0608
Keywords for this article
Index number; cost-of-living index; Lowe index; Cobb-Douglas index; Geometric Young index

Articles in the same Issue

  1. Titelei
  2. Inhalt des 230. Bandes
  3. Die Gutachter zum 230. Jahrgang der Jahrbücher für Nationalökonomie und Statistik (01.01.2010 bis 31.12.2010)
  4. Inhalt / Contents
  5. Introduction to the Special Issue on Index Number Theory and Price Statistics
  6. Abhandlungen / Original Papers
  7. Drobisch’s Legacy to Price Statistics
  8. Notes on Unit Value Index Bias
  9. Aggregate Indices and Their Corresponding Elementary Indices
  10. Lowe and Cobb-Douglas Consumer Price Indices and their Substitution Bias
  11. Reconsideration of Weighting and Updating Procedures in the US CPI
  12. User Costs versus Waiting Services and Depreciation in a Model of Production
  13. Hedonic Price Indexes: A Comparison of Imputation, Time Dummy and ’Re-Pricing’ Methods
  14. Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures
  15. Regional Consumer Price Differences Within Germany
  16. Buchbesprechungen / Book Reviews
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