Showing papers on "Consumer price index published in 1991"

Structural adjustment and the welfare of rural smallholders : a comparative analysis from sub-Saharan Africa

Abstract: The direction and level of changes in real incomes brought about by structural adjustment are determined by a variety of factors, including sources of income, patterns of expenditures, and movements in relative prices in the wake of adjustment. An econometric model is used to derive an index of real income, which is employed for data from Cote d'Ivoire, Ghana, Malawi, Madagascar, and Tanzania. No systematic changes in relative prices, and especially in the ratio of tradable to nontradable prices, were noted after the beginning of adjustment, although the diversity of income sources implies that the implications of movements in relative prices on smallholder welfare are indeed complex. The results indicate that there is no unequivocal pattern of increase or decline in the real welfare of the rural poor but that there are marked differences among countries and regions.

The poor and the social sectors during a period of macroeconomic adjustment : empirical evidence for Jamaica

Abstract: Considerable uncertainty remains about the human impact of macroeconomic adjustment. Analysis of the impact of adjustment on the poor and on the social sectors is difficult because it involves evaluating a counterfactual situation in which households are affected by prices, incomes, and public services with the possibility of substantial substitutions - all within an economywide framework with complicated concurrent and lagged interactions. Time-series data for Jamaica is utilized in this article to examine whether macroeconomic adjustment, initiated in the early 1980s but intensified in 1984-85, was associated with significant deterioration in various indicators of health, nutritional, and welfare outcomes, particularly among the poor. Although the authors find evidence of substantial cuts in governmental expenditures on social services, there is little confirmation of significant short-run deterioration in human capital indicators during the adjustment period.

New Goods and Index Numbers: U.S. Import Prices

Abstract: Researchers constructing index number frequently face the problem of new (or disappearing) goods, for which the price and quantity are not available in some periods. In theory, the correct way to handle a new good is to treat its price before it appears as equal to the reservation price (i.e., where demand is zero); in practice, this method can be difficult to implement. However, if the underlying aggregator function is CES then the reservation price is infinity, and we show that the corresponding price index takes on a very sensible form. We apply this formula to measure the price index for six disaggregate U.S. imports, which have been supplied from many new countries over the past several decades. We find that by incorporating the new supplying countries, the price index for developing countries is significantly lower than would otherwise be measured.

How fast are hospital prices really rising

Abstract: The hospital services component of the Consumer Price Index (CPI) measures the cost of hospital services to private patients paying list prices. It is, however, widely used as an estimate of the overall rate of inflation in hospital prices in spite of the fact that there are strong reasons to believe that it is inappropriate to use the CPI for this purpose. This is because: 1) A growing number of patients are enrolled in health maintenance organizations (HMOs) and preferred provider organizations (PPOs), which negotiate discounts from list prices; and 2) the size of the discounts may have been increasing. The potential result is a gap between the rate of inflation of list prices and the rate of inflation of actual prices paid in transactions. This study explores whether such a gap exists and determines its possible magnitude. In addition, parallel indices for list and actual prices are computed on the basis of data from California hospitals for fiscal years 1983-1988. The analysis suggests that list price inflation has greatly exceeded actual inflation--by a factor of two for recent years. These findings have broad implications for evaluating not only inflation but also the impact of cost containment strategies.

Factors that affect the demand for potato products in the United States

Abstract: A demand model was developed to determine the factors that affect the demand for potato products in the United States. The following market components were analyzed: potato chips; dehydrated-foodservice; dehydrated-retail; fresh; frozen-foodservice; and frozen-retail. Equations were estimated for each of the six components via ordinary least squares. Factors found to affect demand were population, consumer price index, consumer income, consumer debt, retail potato product price, females in the labor force, percentage of households with microwave ovens, restaurant meal expenditures, price of substitute potato products, price of complement products, and advertising expenditures. The demand for all of the potato products was found to be inelastic, but fresh demand was the most inelastic.

Estimating variances for the u.s. consumer price index for 1987-1991

Abstract: In this paper we present initial results of a multi-phase project to compute estimates of the variance of the Consumer Price Index (CPI), and variance estimates of price change reflected by the index for the years 1978 through 1986, the period between the last two major revisions of the CPI. The project includes estimation of index and price change variances which are conditional on December 1977 expenditure weights derived from the 1972-1974 Consumer Expenditure Surveys, estimation of variances of the December 1977 expenditure weights, and combination of these estimates to produce unconditional variances for the index and price change for the 9-year period. Conditional variances for indexes were estimated via replication using random groups, while variance estimates for price change were estimated via a linear approximation using the index variance component estimates computed by replication.

A hospital capital price index.

Abstract: This paper describes the development of a price index for hospital equipment. Based on 10 years of hospital capital acquisition data from a large teaching hospital, equipment acquisitions were categorized and weights derived for each category. Using national producer price indexes for each of these categories, a national hospital equipment index was derived for 1981 to 1991. Forecasts for 1991 and 1992 were then made. The resulting index indicated that price movements of our hospital capital equipment index were very similar to the Implicit Gross Domestic Product Deflator, an index that measures price changes for the nation's Gross Domestic Product. However, because of the relative importance of several categories of equipment (scientific instruments, computers), more widespread data on hospital equipment expenditure patterns would be desirable in order to validate these results.

Substitution Bias and Cost of Living Variability for U.S. Demographic Groups

Abstract: . Intertemporal cost of living variability is analyzed for households with differing income levels and family characteristics. These indexes are based upon the parameter estimates of a comprehensive system of expenditure equations, the quadratic expenditure system. Despite considerable differences in the group-specific share parameters as well as nonlinearities in the Engle curves for each group, little variation occurs in these indexes for several U.S. price series over the 1967–1984 time period. As a result, we find little evidence that group-specific fixed weight indexes are better cost of living approximations than a general Consumer Price Index even though all substitution bias estimates, by income and household type, are quite small.

Price - wage dynamics and the transmission of inflation in socialist economies : empirical models for Hungary and Poland

Abstract: The authors of this paper set up a simple inflation model to analyze the transmission and short-run dynamics of inflation in partially reformed socialist economies. The model has features derived from market economies with few producers and sticky prices. It also tries to capture some attributes of socialist economies, including chronic excess demand in goods markets. Most of the empirical analysis focuses on the period after 1982 when market-related reforms had been implemented. The dynamic price and wage models are simultaneously estimated allowing the authors to explore the role and weight of foreign prices and domestic factors in propagating inflation in Hungary and Poland. They find that cost developments are critical in relating exogenous, policy-determined price adjustments to increases in inflation. In most periods, wages were indexed to prices - but in Poland more complex bargaining games emerged which caused an inability to make centralized wage norms hold. Polish planners relied increasingly on price adjustments to address emerging macroeconomic imbalances, but these only further destabilized the system and failed to address the underlying sources of macroeconomic imbalances. In contrast, the Hungarian experience points to some of the ways administered prices can be used to stabilize the system.

Do Households Misperceive the Price Level? Some Evidence from Survey Data

Abstract: It has been widely held that nominal disturbances influence real economic activity by distorting the public's perception of relative prices. Implicit in this hypothesis is the assumption that there is a lag in the public's perception of the aggregate price level. This paper tests this assumption using the Michigan Survey data on inflation expectations. The econometric results refute the hypothesis that the public is ignorant of the current price level and fail to refute the hypothesis that the public is fully aware of the current consumer price index. There is no evidence of a perception lag in these data.