Oulton, Nicholas - London School of Economics (LSE) - 2009
are many more parameters than observations. Index number theory has solved this problem, at least when demand is … demand is not homothetic, i.e. when not all expenditure elasticities are equal to one. In principle, economic theory tells us … how we should calculate a true cost-of-living index or Konüs price index: first estimate the consumer's expenditure …