Index Numbers: A Stochastic Approach
University of Michigan Press, 1994 - Business & Economics - 242 pages
The stochastic approach considers the index number problem as a signal extraction problem. The strength and reliability of the signal extracted from price and quality changes for different commodities depends upon the messages received and the information content of the messages. The most important applications of the new approach are to be found in the context of measuring rate of inflation; fixed and chain base index numbers for temporal comparisons and for spatial intercountry comparisons: the latter generally require special index number formulae that result in transitive and base invariant comparisons.
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Appendix application assumed average base index numbers base period bias chain base index Chapter column commodity comparisons components computed considered constant construction consumption corresponding currency current period defined definition depends derive discussed Divisia equation errors estimator expenditure expressed Fisher fixed base function Geary-Khamis given groups illustration important index number formulae indices international prices interpreted introduced known Laspeyres and Paasche Laspeyres index leads matrix mean measure method multilateral observed obtain Paasche index parameters percent presented price and quantity price changes price index price index numbers price relatives problem procedure properties provides quantity index reference regression model relative price replace respectively sampling Section selected shares similar simple specification squares standard standard errors statistical step stochastic approach suggests Table term Theil-Tornqvist theoretical tion underlying United utility variables variance vector weights
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