Statistical Analysis of Mexican Inflation at Subindex and Item Level.

In this paper, we conducted a detailed statistical analysis of the behavior of the Mexican CPI price variations from May 2003 to August 2006. Different methodologies allowed identification of posible classification problems of the subindexes and inflationary pressures on specific items during the sample period. Regarding classification problems, education was included in non-core inflation during the sample period; however in our study, it showed similarities in distribution and moments to the subindexes of core inflation. Note that education was reclassified into core inflation from January 2008. Regarding inflationary pressures, the highest means and variances were seen in fruits and vegetables at the subindex level, and in products related to agriculture, processed food, energy, and metals at the ítem level. However further analysis of incidences showed that a considerable part of headline inflation during the studied period was explained by a few individual items.