Tests for Price Indices in a Dynamic Item Universe

• Li-Chun Zhang ^[1] ; Ingvild Johansen ^[2] ; Ragnhild Nygaard ^[2]
  1. [1] University of Southampton

     University of Southampton

     GB.ENG.M4.24UJ, Reino Unido

     
  2. [2] Statistics Norway
• Localización: Journal of official statistics, ISSN 0282-423X, Vol. 35, Nº. 3, 2019, págs. 683-697
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • There is generally a need to deal with quality change and new goods in the consumer price index due to the underlying dynamic item universe. Traditionally axiomatic tests are defined for a fixed universe. We propose five tests explicitly formulated for a dynamic item universe, and motivate them both from the perspectives of a cost-of-goods index and a cost-of-living index. None of the indices that are currently available for making use of scanner data satisfies all the tests at the same time. The set of tests provides a rigorous diagnostic for whether an index is completely appropriate in a dynamic item universe, as well as pointing towards the directions of possible remedies. We thus outline a large index family that potentially can satisfy all the tests.