A review of bias in the CPI

Article type: Research Article

Authors: Obst, Carl^{; 1; 2}

Affiliations: Main Economic Indicators Division, Statistics Directorate, OECD, 2 rue André-Pascal, 75775 Paris Cedex 16, France. E-mail: [email protected]

Note: [1] A revised version of the paper prepared the for Joint ECE/ILO Conference on Consumer Price Indices Geneva, November 3–5, 1999.

Note: [2] The views expressed in this paper are those of the author and do not necessarily reflect the views of the OECD.

Abstract: This paper discusses one of the high profile issues in economic statistics in recent years. The possible existence of bias in consumer price indices (CPI) became an international measurement issue following the release of the Boskin Report in the United States in 1996 although many of the issues had been under investigation for some time. The research before and after the Boskin Report has been widespread and undertaken by many different analysts. This paper attempts to draw together the discussion surrounding bias and to determine appropriate definitions and interpretations of the issues involved. The main conclusion is that it is essential that CPI compilers and users continually assess the index being compiled to ensure its relevance to the economic environment it is attempting to explain.

DOI: 10.3233/SJU-2000-17104

Journal: Statistical Journal of the United Nations Economic Commission for Europe, vol. 17, no. 1, pp. 37-57, 2000