Correspondence:
[*]
Visiting Senior Research Fellow, Bureau of Labor
Statistics, 2 Massachusetts Ave., NE, Washington, DC 20212, USA
Abstract: The advent of bar-code, retail scanner data provides an alternative data source
for the compilation of consumer price indexes. This paper outlines the nature
and merits of such data for this purpose. The data allows aggregation via
superlative index number formulae at a very elementary level and provides
superior coverage to conventional sources. However, it has been argued that
aggregation bias may still arise if the unit values which feed into the
superlative indexes are defined for product items, as opposed to product items
for given outlets. We explore for six products the nature and extent of unit
value bias by outlet type. For three products we found the level of aggregation
did not matter. However, we also found it can matter and established the extent
of its effects which were always the aggregation by model only, falling less
than by model and outlet. This should help provide a basis for an understanding
of the issues at stake in the use of scanner data for the compilation of
consumer price indexes.
Keywords: consumer price indexes, superlative, index number formulae, inflation measurement, scanner data, elementary aggregates
