The Laspeyres bias in the Spanish consumer price index

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dc.contributor.author Ruiz-Castillo, Javier
dc.contributor.author Ley, Eduardo
dc.contributor.author Izquierdo, Mario
dc.contributor.other FEDEA
dc.date.accessioned 2009-07-14T09:40:49Z
dc.date.available 2009-07-14T09:40:49Z
dc.date.issued 2000
dc.identifier.uri http://hdl.handle.net/10016/4730
dc.description.abstract The CPI compares the cost of acquiring a reference quantity vector at current and base prices. Such reference vector is the vector of mean quantities actually bought by a reference population, whose consumption patterns are investigated during a period t prior to the index base period 0. In this paper we show that unless one takes into account the price change between these two dates, the CPI ceases to be a proper statistical price index of the Laspeyres type. Among several negative consequences, the most important is that this omission produces a bias in the measurement of inflation which we call the `Laspeyres bias.' Using Spanish data, we estimate that, e.g., from 1992 to 1998, the size of the Laspeyres bias is -0.061 per cent per year, or about 6 per cent (in absolute terms) of the positive bias estimated by the Boskin commission for the U.S., which is equal to 1.1 per cent per year. The Laspeyres bias in shorter time periods reached -0.122, and -0.108 per cent per year in 1992, and 1997, respectively
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Documento de trabajo
dc.relation.ispartofseries 2000-05
dc.relation.hasversion http://hdl.handle.net/10016/4752
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Modified Laspeyres
dc.subject.other Cost-of-living index
dc.subject.other CPI measurement
dc.title The Laspeyres bias in the Spanish consumer price index
dc.type workingPaper
dc.subject.jel C43
dc.subject.jel D31
dc.subject.jel D63
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
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