Showing papers on "Consumer price index published in 2008"
TL;DR: In this article, the authors investigate the short and long-term effects of the price war on store visits, on spending, and on the sensitivity of these decisions to weekly prices and price image.
Abstract: Although retail price wars have received much business press and some research attention, it is unclear how they affect consumer purchase behavior. This article studies an unprecedented price war in Dutch grocery retailing that started in fall 2003, initiated by the market leader to halt its sliding market share. The authors investigate the short- and long-term effects of the price war on store visits, on spending, and on the sensitivity of these decisions to weekly prices and price image. They use a unique data set with consumer hand-scan and perceptual data for a national panel of 1821 households, covering two years before and two years after the price war started. Although the price war initially entailed more shopping around and increased spending, spending per visit ultimately dropped because consumers redistributed their purchases across stores. The price war made consumers more sensitive to weekly prices and price image, which helped both the chain that showed an improvement in price image...
166 citations
TL;DR: This work proposes a simple method of multiplying the income limits of classification with a multiplication factor and rounding off the values to the nearest rupee to achieve the standard of living actually attained in the base period of the WPI in India.
Abstract: Socioeconomic Status (SES) is an important determinant of the standard of living and health status as it influences the incidence and prevalence of various health conditions. Socioeconomic status also influences social security in terms of the accessibility, affordability, acceptability and actual utilization of various health facilities.
The need for developing a uniform system of socioeconomic classification of the population universally based on the income with scientific basis and should applied with ease and simplicity in each sector or strata wise of population.
There have been several attempts to develop different scales to measure socioeconomic status but Prasad's classification (1961)(1) based on the per capita monthly income and later modified in 1968(2) and 1970,(3) has been extensively used in the Indian scenario and has been quite effective in performing the t task under discussion. But with the passage of time and due to the inflationary trends in the economy, the original income limits set in these classifications have become substantially low and impractical. Realizing this need, Kumar(4) has updated the classification linked with the All India Consumer Price Index (AICPI) which has also become impractical today and has lower validity due to great variations in the Consumer Price Index.
By 1993–1994 however, the inflation rate was governed by the All India Whole Price Index series,(5) creating an urgent need to link Prasad's classification (1961) with the All India Whole Price Index whereas Prasad's (1961) classification has taken for a basis of modification in terms of latest scenario of cost of living index (COLI). In order to solve this problem, a hypothetical value (0.53)(6) has been developed in relation to the base year of 1993-1994 when the new series of the All India Wholesale Price Index started.(5,7)
The hypothetical value was calculated based on the concept of the cost-of-living index (COLI), which pertains to the WPI in India. As the COLI is not directly observable, the WPI employs a number of formulae that offer approximations to the measurement objectives. WPI uses the Laspeyres formula to average the price changes due to inflation across different categories of items, because COLI for the each current month is based on the cost of this month's market prices for the items used by the community may be changed due to inflation in wholesale price, of achieving the standard of living actually attained in the base period.(8,9)
The ratio of this hypothetical cost to the actual cost of the base period is the lowest expenditure level necessary at this month's price to achieve the base period's living standard. This framework of WPI and the inflation rate from the base period has guided and will continue to guide operational decisions about the construction of the index.(8,9)
It is a simple method of multiplying the income limits of classification with a multiplication factor and rounding off the values to the nearest rupee. Multiplying the AIWPI at the time of study by the hypothetical value could help to derive the multiplication factor.
Therefore, the multiplication factor = Value of AIWPI(10) × 0.53
The next step is to multiply Prasad's income limits by the multiplication factor. There is one more class-‘Below Poverty Line’ (BPL) included by the author because this concept of Below Poverty Line was not started in 1961.
Income limits thus obtained, are far more practical and realistic. For example, to compute a social classification for December 2004, the multiplication factor will be = 189.2(10) × 0.53 = 100.27 or 100.
The proposed classification for this period is given in Table 1.
Table 1
Proposed social classification for the month of December 2004
As such the value of the AIWPI has not varied according to the geographical area or work forces and urban or rural conditions do not influence the classification. Hence, the value of the AIWPI can be used safely and are regularly published in various weekly fortnightly financial newspapers and magazines.
152 citations
TL;DR: In this paper, the authors show that restaurant prices rise in response to minimum wage increases under several sources of identifying variation, such as store-level and aggregated consumer price index data.
Abstract: Using store-level and aggregated Consumer Price Index data, we show that restaurant prices rise in response to minimum wage increases under several sources of identifying variation. We introduce a general model of employment determination that implies minimum wage hikes cause prices to rise in competitive labor markets but potentially fall in monopsonistic environments. Furthermore, the model implies employment and prices are always negatively related. Therefore, our empirical results provide evidence against the importance of monopsony power for understanding small observed employment responses to minimum wage changes. Our estimated price responses challenge other explanations of the small employment response, too.
112 citations
TL;DR: In this article, the food component of the CPIAL understated the rate of food price inflation, and the overall weight of food was also too large, so that the growth in the general CPIAL was understated during this period when food prices fell relative to nonfood prices under conservative assumptions, the 5-year growth in reported CPIAL of 106 percent should have been 143 percent Indian poverty lines are held constant in real terms and are updated using the food and non-food components of the official indices weighted by the food shares of households near the poverty line.
Abstract: The Indian national sample surveys collect data on the unit values of a large number of foods which can be used to compute price index numbers that can be compared with the official national price indexes, the Consumer Price Index for Agricultural Labourers (CPIAL) for rural India, and the Consumer Price Index for Industrial Workers (CPIIW) for urban India Over the five years from 1999?2000 to 2004?05, the food component of the CPIAL understated the rate of food price inflation This overstatement is likely attributable to the use of long outdated weights (from 1983), and the resultant overweighting of cereals, particularly coarse cereals, whose prices fell relative to other foods The overall weight of food in the CPIAL is also too large, so that the growth in the general CPIAL was understated during this period when food prices fell relative to nonfood prices Under conservative assumptions, I calculate that the 5 year growth in the reported CPIAL of 106 percent should have been 143 percent Indian poverty lines are held constant in real terms and are updated using the food and non-food components of the official indices weighted by the food shares of households near the poverty line Because these weights come from a 1973?4 survey, food is heavily over weighted for the contemporary poor, and the nominal poverty lines are understated, both because the CPIAL food index is understated, and because too much weight is assigned to food in a period when food prices have been falling relative to nonfood prices As a result, and ignoring other problems with the counts (doubtful interstate and intersectoral price indexes and the growing discrepancy between surveys and national accounts), the official poverty counts for rural India in 2004?5 are too low; the official headcount ratio of 283 percent should be closer to 31 percent; at current rates of rural poverty reduction, this eliminates more than three years of progress More generally, it is clear that the weights used for price indexes should be updated more frequently than is presently the case, something that could be straightforwardly done using India?s regular system of household expenditure surveys
48 citations
TL;DR: This study investigates whether up-market European hotels use three yield management practices, finding that while one quarter use the first technique, use of the two other practices was considerably lower, suggesting a lack of sophisticated yield management among participants.
Abstract: In the hotel sector, yield management traditionally balances a supply of perishable room nights against demand by manipulating price and time of consumption. While widely accepted, Internet-based distribution channels with different cost structures complicate the process. Hotels must not only manipulate price in response to supply and demand, but must also choose which portfolio of distribution channels to use. This study investigates whether up-market European hotels use three yield management practices: varying room rates with market demand; varying participation in Internet channels with market demand; and differentiating rates on Internet channels in times of high demand. Introducing the concept of a consumer price index for hotel rates, the study found that while one quarter use the first technique, use of the two other practices was considerably lower, suggesting a lack of sophisticated yield management among participants.
47 citations
TL;DR: In this article, the authors examined regional price differential in urban China over the period 1986 to 2001, and adopted the Engel's curve approach to estimate a spatial price index for different provinces.
Abstract: Despite the intensive efforts made by economists to examine regional income inequality in China, limited attention has been paid to disentangle the contribution of regional price differentials. This paper examines regional price differential in urban China over the period 1986 to 2001. Spatial Price Index (SPI) is normally calculated using the Basket Cost Method, which defines a national basket and measures price variation of this common basket across different regions. The weakness of this method is that it arbitrarily assumes consumers' preferences and has a strong reliance on good regional level price data, which are often not available. This paper adopts the Engel's curve approach to estimate a Spatial Price Index for different provinces. The SPI obtained from the Engel's curve approach indicates larger regional price variations than those obtained from the Basket Cost method. Further, regional price variations in urban China increased significantly during the late 1980s to early 1990s, stabilized at a relatively high level during the mid to end 1990s. Adjusting for the regional price variations our finding suggests that regional income inequality increased the most between the late 1980s and early 1990s, and stabilized in the mid 1990s, which contradicts previous findings using unadjusted income.
44 citations
TL;DR: This study has created a forecast model MFDD (Model of Forecasting the Domestic Debt) which is very good with a strong estimation capability according to the findings in this study.
Abstract: Artificial intelligence technologies have been used in a number of fields such as engineering, education, medicine and industry successfully. These technologies, likewise, can be applied to finance and economies to solve complex problems for example; the problems about the predicting of the domestic debt stock. The correct prediction of borrowing for the determination of macroeconomic targets concerning the future economic plans is of great importance, because, the fact that the correct prediction (or forecast) will bring about successful decisions and will provide benefit maximizing has increased the interest in Forecast Modeling. In this study, using 10 years' monthly values of Currency Issued (CI), Total Money Supply (TMS), Consumer Price Index (CPI) and Interest Rate (IR), by means of Adaptive Neuro-Fuzzy Inference System, we have created a forecast model MFDD (Model of Forecasting the Domestic Debt) in order to predict domestic debt. It can be said that our MFDD model is very good with a strong estimation capability according to the findings in this study.
43 citations
TL;DR: Trends in the price of healthy and less‐healthy foods from 1989 to 2007 using the Australian Consumer Price Index (CPI) are examined.
39 citations
GfK1
TL;DR: In this article, the authors examined the relationship between retailer brand market shares and consumer prices and investigated whether changes in category price and expenditure are due to changes in customer purchase patterns or changes in relative price levels (price gap) of RBs and national brands.
38 citations
Journal Article•
TL;DR: For example, Stewart et al. as mentioned in this paper developed an experimental consumer price index for Americans 62 years of age and older, which was reconstructed to 1982; hence, CPI-E data are now available for 25 years, from December 1982 through December 2007.
Abstract: Kenneth J. Stewart The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a representative market basket of consumer goods and services. The Bureau of Labor Statistics (BLS) publishes measures of price change for two official population groups. The Consumer Price Index for All Urban Consumers (CPI-U) represents the spending habits of about 87 percent of the population of the United States,1 and the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a subset of the CPI-U population, represents about 32 percent of the U.S. population. As the U.S. population ages, policymakers have become increasingly interested in issues facing older Americans.2 In 1987, Congress directed BLS to begin calculating a consumer price index for the elderly. In response, BLS developed an experimental consumer price index for Americans 62 years of age and older. Commonly called the CPI-E, the index was reconstructed to 1982; hence, CPI-E data are now available for 25 years, from December 1982 through December 2007.3 The experimental CPI-E has moved somewhat differently than the CPI-U and the CPI-W over the last quarter century. From December 1982 to December 2007, the experimental CPI-E rose 126.5 percent, compared with increases of 115.2 percent for the CPI-U and 110.0 percent for the CPI-W. That translates into average annual increases of 3.3 percent, 3.1 percent, and 3.0 percent for the CPI-E, CPI-U, and CPI-W, respectively.
34 citations
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01 Mar 2008TL;DR: In this paper, the authors examined the hypothesis of economic-driven tourism growth in Malaysia by using econometric modelling and showed the importance of tourism industry in enhancing trade performance and economic development.
Abstract: Many studies have shown the importance of tourism industry in enhancing trade performance and economic development. This study examines the hypothesis of ‘economic-driven’ tourism growth in Malaysia by using econometric modelling. To generate the empirical analysis, this study used data from 1980-2007 to analyze the economic-driven tourism growth by using vector autoregressive (VAR) estimation. The long-run relationship between specific variables is considered using the Johansen and Juselius cointegration analysis. Finally, Granger-causality results implies causal relationship of economic-driven tourism growth in Malaysia. Therefore, this study suggests policies and strategies to overcome the importance of economic-driven tourism in Malaysia in the future.
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TL;DR: In this article, the impacts of oil price shocks on the macroeconomic performance in Nigeria using Vector Autoregression (VAR) approach was investigated using an annual data between the periods 1970-2005.
Abstract: This study investigates the impacts of oil price shocks on the macroeconomic performance in Nigeria using Vector Autoregression (VAR) approach. Forecast error variance decomposition is estimated using seven key macroeconomic variables namely, real gross domestic product, consumer price index, real oil revenue, real money supply, real government recurrent expenditure, real government capital expenditure and real oil price. An annual data between the periods 1970-2005 were employed. The Johansen cointegration test identifies at least four cointegrating vectors among the variables. The forecast error variance decomposition estimated from the VAR model shows that oil price shocks significantly contribute to the variability of oil revenue and output. On the other hand, the result reveals that oil price shock does not have substantial effects on money supply, price level and government expenditure in Nigeria over the period covered by the study. This is evident, as its contributions to the variability of these variables are very minimal. The study again reveals that the variability in the price level, apart from its own shock, is explained substantially by output and money supply shocks. Also, apart from its own shock, the variability in money supply is also explained by price level and output. This finding confirms, therefore, that oil price shock may not be necessarily inflationary especially, in the case of an open developing economy like Nigeria. The policy implication of this is that fiscal policy can be used more effectively to stabilise the domestic economy after an oil shock.
TL;DR: In this article, the econometric estimation of regional price indices for German NUTS 3 regions is used to analyse price disparities in the period 1995-2004 across German Nuts 3 regions.
Abstract: In EU countries, knowledge on spatial disparities in overall price level is extremely scarce. When interregional price disparities are large, however, nominal income measures fail to assess prosperity and the catch-up processes of regions. Despite its importance for regional policy, no official regional price statistic is available as a standard. On account of this gap, this paper deals with the econometric estimation of regional price indices for German NUTS 3 regions. Econometric price models for the consumer price index (CPI) and the housing rent index (HRI) are developed on the ground of utility maximization in a two-goods model. The estimated price indices are used to analyse price disparities in the period 1995–2004 across German NUTS 3 regions. Real income comparisons show that the East /West gap is likely to be substantially larger than assessed from incomplete price data in previous studies.
TL;DR: In this article, the authors investigated whether gold is an internal hedge and/or an external hedge against Turkish lira (TL) by using monthly data from January 1995 to November 2006, and concluded that gold acts as an effective hedge against potential future TL depreciation and rising domestic inflation.
Abstract: This paper investigates whether gold is an internal hedge and/or an external hedge against Turkish lira (TL) by using monthly data from January 1995 to November 2006. Cointegration test results confi rm the long-term relationships between the gold price and consumer price index and between the gold price and TL/US dollar exchange rate. The Granger Tests, based on vector error correction model (VECM), indicate that gold price Granger causes the consumer price index and TL/US dollar exchange rate in a unidirectional way. It is concluded that gold acts as an effective hedge against potential future TL depreciation and rising domestic infl ation. Furthermore, gold price may be considered as a good indicator of infl ation and hence it can be used as a guide to monetary policy.
TL;DR: This article examined the compilation methods of the general construction price index in Britain and found that the indices measure the price movement of more traditional building trades but failed to capture the productivity growth rate of the construction sector.
Abstract: The major message that I will be trying to convey is that we often misinterpret the available data because of inadequate attention to how they are produced … (Griliches, 1994, p. 2) The importance of accurate measurement and pertinent modelling of the general level of construction prices cannot be overemphasized. Uses range from macroeconomic statistics such as real value of investment to micro‐level budgeting like construction project price forecasts. Numerous research studies posit that the measured productivity growth rates of the construction sector are distorted and that an inaccurate general construction price index is a main villain of the piece. The academic research published in this arena has primarily focused on models to forecast or predict changes in the general construction price level, whereas this research scrutinizes the compilation methods of the general construction price index in Britain and finds that the indices measure the price movement of more traditional building trades but almos...
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TL;DR: In this paper, the interaction of budget deficit of India with other macroeconomic variables such as Nominal effective exchange rate, GDP, Consumer Price Index and money supply was studied with special emphasis on the budget deficit-exchange rate relationship using Cointegration approach and Variance Error Correction Models (VECM) for the period 1970-2002.
Abstract: This paper tries to study the interaction of budget deficit of India with other macroeconomic variables such as Nominal effective exchange rate, GDP, Consumer Price Index and money supply (M3) giving special emphasis on the budget deficit-exchange rate relationship using Cointegration approach and Variance Error Correction Models (VECM) for the period 1970-2002. The results reveal that the variables under study are cointegrated and there is a bi-directional causality between budget deficit and nominal effective exchange rates. However, we have not observed any significant relationship between budget deficit and GDP, Money supply & consumer price index. It is also observed that the GDP Granger-causes budget deficit where as budget deficit does not.
TL;DR: There is a considerable degree of heterogeneity in price setting practices, and prices of goods change more often than prices of services; price reductions are common, as they account to around 40% of total price changes.
Abstract: This paper identifies the empirical stylized features of consumer price setting behavior in Portugal using two micro-datasets underlying the consumer price index. The main conclusions are: one in every four prices change each month; there is a considerable degree of heterogeneity in price setting practices; prices of goods change more often than prices of services; price reductions are common, as they account to around 40% of total price changes; price changes are, in general, sizeable; finally, the price setting patterns seem to depend on the level of inflation as well as on the type of outlet.
TL;DR: In this article, the authors take an exhaustive approach to measurement issues in price index construction for the BLS airfare index and find an upward bias in the air fare index over the period considered.
Abstract: Our research takes an exhaustive approach to measurement issues in price index construction for the BLS airfare index. We pursue a number of the objectives for dealing with the biases that the 1997 CPI Commission recommended and detail a protocol for data collection and analysis that can be replicated and can be enhanced by availability of additional data sources. We find an upward bias in the BLS airfare index over the period considered. However, because of issues of practicality and implementability of the methods we utilize in our analysis, the goals of the Commission recommendations remain illusive and problematic in being more broadly applied to other components of the CPI.
TL;DR: In this paper, the authors set up a model of nonresponse bias, parameterize it, and test it using a BLS microdata set for rents, showing that the official BLS CPI-W price index for tenant rents rose 3.6 percent annually; the authors argue that it should have risen 5.0 percent annually.
Abstract: Until the end of 1977, the U.S. consumer price index for rents tended to omit rent increases when units had a change of tenants or were vacant, biasing inflation estimates downward. Beginning in 1978, the Bureau of Labor Statistics (BLS) implemented a series of methodological changes that reduced this nonresponse bias, but substantial bias remained until 1985. The authors set up a model of nonresponse bias, parameterize it, and test it using a BLS microdata set for rents. From 1940 to 1985, the official BLS CPI-W price index for tenant rents rose 3.6 percent annually; the authors argue that it should have risen 5.0 percent annually. Rents in 1940 should be only half as much as their official relative price; this has important consequences for historical measures of rent-house-price ratios and for the growth of real consumption. (Revision forthcoming in Review of Economics and Statistics.)
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TL;DR: In this paper, the impact of price changes on poverty using the Philippines as an example is measured by the price elasticity of poverty for three widely used poverty measures, namely, headcount ratio, poverty gap ratio, and severity of poverty.
Abstract: This paper measures the impact of price changes on poverty using the Philippines as an example. The impact of price changes is captured by the price elasticity of poverty for three widely used poverty measures, namely, headcount ratio, poverty gap ratio, and severity of poverty. An empirically operational price index called the price index for the poor is developed, which indicates whether the price changes hurt the poor relatively more than the nonpoor. Furthermore, the paper develops formulae for aggregating regional price indices into the national price indices. The results show that since 2003, price increases have led to greater suffering for the poor, particularly the ultra poor.
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01 Jan 2008
TL;DR: In this article, the authors provided an empirical update on the impact of an unanticipated change in monetary policy on output growth and inflation in Pakistan using high frequency data and multivariate structural vector auto-regressions technique with long run restrictions based on standard aggregate demand and supply model.
Abstract: The study provides an empirical update on the impact of an unanticipated change in monetary policy on output growth and inflation in Pakistan. We use high frequency data and multivariate structural vector auto-regressions technique with long run restrictions based on standard aggregate demand and supply model of the economy. The results indicate that an unanticipated positive shock in monetary policy leads to: (i) an increase in industrial output, which revert to its original level over 23 to 32 month horizon; (ii) an increase in inflation; and (iii) nominal shocks remained the dominant factor in explaining variation in inflation as compared to supply disturbances. Transmission mechanism is much faster in case of Consumer Price Index (CPI) compared to Industrial Production Index (IPI), as over 75 percent increase in CPI is realized during 12 months after the shock and this impact reaches the level of over 90 percent during 18 months. Sensitivity of these results to another specification indicates that response patterns of both IPI and CPI remain unchanged.
01 Jan 2008
TL;DR: In this article, the authors used a Bayesian spatial smoothing approach to obtain individual county price levels that are aggregated to regional price parities (RPPs) for 363 metropolitan areas and 51 states in the United States.
Abstract: Price indexes are commonly used in time-to-time economic series to adjust for changes in price levels across years. This paper estimates price parities within the U.S., defined as an adjustment for differences in price levels across geographic areas at one point in time. The term parity is more frequently used in international comparisons, where purchasing power parities (PPPs) are divided by the exchange rate to denote differences in price levels across countries. The method described here for calculating regional PPPs is based on micro-level price data from the Consumer Price Index of the Bureau of Labor Statistics and on the American Community Survey of the Census Bureau. It uses a Bayesian spatial smoothing approach to obtain individual county price levels that are aggregated to regional price parities (RPPs) for 363 metropolitan areas and 51 states in the United States. An example of their relevance is given by comparing the Personal Income and Gross Domestic Product estimates produced by the Bureau of Economic Analysis for the year 2005 at national prices and at regional price parities.
TL;DR: In this article, the authors developed a unitary theory that can be used in all situations in which monetary measures have been used, which implies a uniquely optimal measure which turns out to be the Tornqvist index.
Abstract: The most important economic measures are monetary. They have many different names, are derived in different theories and employ different formulas. Yet, they all attempt to do basically the same thing: to separate a change in nominal value into a 'real part' due to the changes in quantities and an inflation due to the changes of prices. Examples are: real national product and its components, the GNP deflator, the CPI, various measures related to consumer surplus, as well as the large number of formulas for price and quantity indexes that have been proposed. The theories that have been developed to derive these measures are largely unsatisfactory. The axiomatic theory of indexes does not make clear which economic problem a particular formula can be used to solve. The economic theories are for the most part based on unrealistic assumption. For example, the theory of the CPI is usually developed for a single consumer with homothetic preferences and then applied to a large aggregate of diverse consumers with non-homothetic preferences. In this paper I develop a unitary theory that can be used in all situations in which monetary measures have been used. The theory implies a uniquely optimal measure which turns out to be the Tornqvist index. I review, and partly reinterpret the derivations of this index in the literature and provide several new derivations. The paper also covers several related topics, particularly the presently unsatisfactory determination of the components of real GDP.
Journal Article•
TL;DR: In this paper, the authors discuss the impact of not regularly incorporating new products and changes in quality, and related deficiencies of the official wholesale and consumer price indices and draw on an official United States commission report that studied the implications of productivity changes for measuring inflation.
Abstract: With inflation shooting up, it is an appropriate time to critically discuss the quality of India's inflation statistics. This article first discusses the official wholesale and consumer price indices and the impact of not regularly incorporating new products and changes in quality, and related deficiencies. It also draws on an official United States commission report that studied the implications of productivity changes for measuring inflation. The paper concludes with suggestions for revising the procedures for collecting and compiling price information and also recommends preparation of a new producer price index to replace the official Wholesale Price Index and, in addition to the consumer price indices, the compilation of an annual "cost of living index".
25 Feb 2008
TL;DR: In this paper, the authors use household-level data on quantities purchased and prices paid to construct a measure of the savings made by consumers' optimizing behavior in the purchase of food.
Abstract: A common approach to measuring price changes is to look at the change of the expenditure needed to purchase a fixed basket of goods. It is well-known that this approach suffers from problems and creates several biases in the measurement of price changes faced by consumers. Substitution and outlet bias, two commonly studied concerns, are both driven by consumer choices of what and where to buy. However, consumers also make other choices, including how much and when to buy. We discuss the implications of consumers' timing and quantity decisions have on standard practices of computing of computing a price index. We use household-level data on quantities purchased and prices paid to construct a measure of the savings made by consumers' optimizing behaviour in the purchase of food. In particular, we compare the prices actually paid by the consumers to various alternatives that do not allow for substitution. Our analysis suggests that the average consumer makes significant, and comparable in magnitude, savings from the four dimensions of choice that we study. Furthermore, our data suggests significant heterogeneity in consumer behavior, and that this behavior is correlated with demographics. Our findings suggest that ignoring timing and quantity decisions, when computing a price index, can generate biases on the order of magnitude of substitution and outlet biases.
TL;DR: In this article, the authors examined the impact of firm size, industry concentration and the length of production on the speed of price adjustment in the Australian manufacturing industry and found that the industry speed is positively related to firm size and negatively related to industry concentration.
Abstract: This paper aims to examine the impact of firm size, industry concentration and the length of production on industry speed of price adjustment. To motivate the paper, an industry pricing model in error correction form is derived from firm pricing behaviour. As a new development, firms are assumed to have price adjustment costs that are a function of their size. The empirical model is estimated using two‐digit Australian manufacturing industry data for the period 1994:3 to 2006:1. The results suggest that the industry speed of price adjustment is positively related to firm size and negatively related to industry concentration and the production lag. Implied values for industry speeds of price adjustment are generally small when compared to other country industry studies. However, the industry average median lag of 7.1 quarters indicates a slightly faster speed of price adjustment than the estimate for the Australian consumer price index by Dwyer and Leong (2001).
Patent•
22 Dec 2008TL;DR: In this paper, a consumer price index is determined using both panelist and point-of-sale market research data, and a method to determine the consumer index using the weighted equivalent unit pricing information is presented.
Abstract: Systems and methods for consumer price index determination using panel-based and point-of-sale market research data are disclosed. An example method to determine a consumer price index disclosed herein comprises obtaining panelist market research data determined by monitoring items purchased by a plurality of statistically-selected panelists, obtaining retail site market research data for items sold by a plurality of retail sites, combining the panelist market research data and the retail site market research data to determine weighted equivalent unit pricing information for each group of common items in an item stratum of the consumer price index having substantially similar attributes except for a unit amount, and determining the consumer price index using the weighted equivalent unit pricing information.
Posted Content•
TL;DR: In this article, the authors set up a model of nonresponse bias, parameterize it, and test it using a BLS microdata set for rents, showing that the official BLS CPI-W price index for tenant rents rose 3.6 percent annually; the authors argue that it should have risen 5.0 percent annually.
Abstract: Until the end of 1977, the U.S. consumer price index for rents tended to omit rent increases when units had a change of tenants or were vacant, biasing inflation estimates downward. Beginning in 1978, the Bureau of Labor Statistics (BLS) implemented a series of methodological changes that reduced this nonresponse bias, but substantial bias remained until 1985. The authors set up a model of nonresponse bias, parameterize it, and test it using a BLS microdata set for rents. From 1940 to 1985, the official BLS CPI-W price index for tenant rents rose 3.6 percent annually; the authors argue that it should have risen 5.0 percent annually. Rents in 1940 should be only half as much as their official relative price; this has important consequences for historical measures of rent-house-price ratios and for the growth of real consumption. (Revision forthcoming in Review of Economics and Statistics.)