A consumer price index excluding tax changes: the Netherlands experience

Article type: Research Article

Authors: Haan, Jan de^{a; *}

Affiliations: [a] Division Socioeconomic Statistics Statistics Netherlands P.O. Box 4000 2270 JM, Voorburg the Netherlands. Tel.: +31 70 337 5720, Fax: +31 70 337 5985, E-mail: [email protected]

Correspondence: [*] I thank Bert M. Balk, Dirk-Jan Hoogerdijk and Leendert Hoven for helpful comments. The views expressed in this paper are solely mine and do not necessarily reflect the policies of Statistics Netherlands

Abstract: More than two decades ago Statistics Netherlands started the construction of consumer price indexes excluding tax changes. At the latest index revision, the method has been changed. The present paper gives an elaboration of the principles behind the computation of the current Netherlands net price index and presents empirical results for the period 1990--1996. A distinction is made between direct tax effects due to changes in taxes levied on consumer goods and services, and indirect effects resulting from changes in taxes levied on intermediate products used in the production processes of enterprises. The indirect effects, estimated with the help of (cumulated) input-output coefficients, appear to be quite small as compared to the direct effects.

Keywords: net price index, consumption taxes, input-output analysis

DOI: 10.3233/JEM-1998-0148

Journal: Journal of Economic and Social Measurement, vol. 24, no. 3-4, pp. 233-248, 1998