The Path-Dependence Bias in Approximating Local Price Levels by CPIs

Lacking data on price levels across locations, economists are forced to proxy them. One method is to extrapolate the price levels known for locations in some point in time to another point by multiplying the initial price levels by the local CPIs. With the use of simulation experiments, this paper demonstrates that such a method is inadequate, since the path dependence of CPI alone produces considerable biases distorting cross-location comparisons of price levels

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Year of publication:	2017
Authors:	Gluschenko, Konstantin
Publisher:	[2017]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Verbraucherpreisindex \| Consumer price index \| Preisniveau \| Price level \| Systematischer Fehler \| Bias \| Pfadabhängigkeit \| Path dependence

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Extent:	1 Online-Ressource (10 p)
Type of publication:	Book / Working Paper
Language:	English
Notes:	In: Journal of Economics Library, 2016, 3 (1), 69-76. DOI: 10.1453/jel.v3i1.667 Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 21, 2016 erstellt
Classification:	C15 - Statistical Simulation Methods; Monte Carlo Methods ; C43 - Index Numbers and Aggregation ; E31 - Price Level; Inflation; Deflation ; R19 - General Regional Economics. Other
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012943783