Abstract: The paper gives an overview of the new Consumer Price Index Manual that was released in 2004 and of its compilation process. This manual is a milestone for calculation of consumer price indices (CPI) and is much more comprehensive than any other methodological document published on this subject. It is meant to provide an answer to all questions that users and compilers may have with no need to consult other sources.
Abstract: The treatment of seasonal products in a Producer or Consumer Price Index is presented in Chapter 22 of the new international manuals on PPI/CPI. In this paper we attempt to execute many of the solutions proposed in measurement of seasonal products by inserting “real” market data from the Israeli CPI. The paper has three objectives: (1) to summarize Chapter 22 on the treatment of seasonal products; (2) to describe some of the methods used in the Israeli CPI to overcome seasonal fluctuations (and bias) in a month to month index, (3) to compare the results based on real CPI data…with those in the manuals that re based on artificial data set.
Abstract: A number of Central Banks use a measure of core inflation as an operational guide and analytical tool for monetary policy. But what is core inflation and why is it considered useful? This paper considers the conceptual basis underlying alternative measures of core inflation and why they are considered effective indicators of the underlying inflationary pressure in the economy. Existing research evaluating the various measures against a range of ideal properties is reviewed. The paper also gauges the value of the core inflation measures against traditional standard statistical approaches using seasonal adjustment and the estimation of the underlying trend.
Abstract: This paper provides a descriptive analysis about Canada's experience in the area of its CPI expenditure weights and their construction. It starts by presenting the purpose, structure and scope of the Canadian CPI expenditure weights, a section that could very well extend to many other national CPIs. Also discussed are the various steps involved with updating the Canadian CPI basket as well as the information sources for the expenditure weights. In the end, I speculate as to possible future directions with regards to the treatment of weights in the CPI.
Keywords: CPI, expenditure weights, family expenditure survey, food expenditure survey, survey of household spending
Abstract: This paper discusses how a practically used index for the cost of owner occupied housing can be interpreted and understood in a theoretical framework of user cost. The considerations particularly apply to the present treatment of owner occupied housing in the Swedish Consumer Price Index, and they show how the present method can be conceptually interpreted in comparison to a new recently proposed approach. The view suggested here may on the one hand explore possible motivations for the present Swedish method, and on the other hand highlight some of its deficiencies. In particular it is seen that the present index…theoretically depends somewhat artificially on the duration of ownership of homes, but that under present practical conditions it appears to provide a reasonable approximation of the cost change.
Keywords: capital cost, consumer price index, cost-of-living index, depreciation, durable assets, mortgage interest, opportunity cost, real interest
Abstract: There are two main approaches to measuring Owner Occupied Housing: the flow of services approach (covering rental equivalence and user cost) and the net acquisition. They use market price information for price measurement in the calculation of consumer's use of own housing. This paper describes these methods and treats extensively the simple user cost used for the calculation of owner occupied housing in Iceland. This method measures expenditure shares based on sticky real interest rate and depreciation. The price change of property is measured by a constant quality price index for all properties sold.
Keywords: consumer price index, cost of living index, household expenditure surveys, owner occupied housing, user cost
Abstract: Differences in the structure of expenditure and in consumption patterns may lead to different inflation faced by different households. Therefore many users are asking for a family of indices that measure the variation of consumer prices for the population sub-groups. This papers deals with the main purposes of consumer price indices (CPIs) and the construction of those indices. It also examines the problems of their practical computation and gives some recommendations for improvements of the presently calculated CPIs for sub-groups of population.
Abstract: The rapidly changing environment of economic transition may create special problems for calculation of index numbers that require a fixed basket of goods and retail outlets. Using referent-level data we find that fixed-weight Laspeyres index on average overstated cost of living increases by approximately 5 percent a year when compared with a superlative index in the Czech Republic. This difference is smaller than might be expected given the large changes in relative prices that occurred during transition and suggests that consumer substitution impacts may have been largely offset by other factors, especially rising prices combined with increased consumption of some…goods as artificial shortages under communism were removed. Indeed, in the period of growing supply in response to price liberalization, the Laspeyres index appears to understate increases in the cost of living.
Abstract: This paper discusses how the Australian Bureau of Statistics (ABS) compiled its series of experimental price indexes for financial services. It discusses how the ABS calculated both the weight, and the estimates of changes in price, for interest margins, fees and charges, and indirect taxes. It also discusses some of the more difficult issues which the ABS encountered during development.