Statistical offices try to match item models when measuring inflation between two periods. However, for product areas with a high turnover of differentiated models, the use of hedonic indexes is more appropriate since they include the prices and quantities of unmatched new and old models. The...

This paper examines the quality of data collected in the Consumer Expenditure (CE) Survey, which is the source for the Consumer Price Index weights and is the main source of U.S. consumption microdata. We compare reported spending on a large number of categories of goods and services to...

The paper revisits Harper, Berndt and Wood (1989) and calculates Canadian reproducible capital services aggregates under alternative assumptions about the form of depreciation, the opportunity cost of capital and the treatment of capital gains. Five different models of depreciation are...

The Consumer Price Index does not take into account the fact that consumers alter the composition of their purchases in response to changes in relative prices. This substitution effect will cause the CPI to grow faster than the cost of living. This paper presents new estimates showing that this...

A number of analysts have claimed recently that the consumer price index overstates the annual increase in the cost of living. This paper develops a framework for studying measurement problems in the consumer price index and systematically analyzes the available evidence concerning the magnitude...

I count the number of times per month that the word `shortage' appears on the front page of The Wall Street Journal and The New York Times for the period 1969-1994. Using this as a general measure of shortages in the US economy, I test whether shortages help predict inflation. Using a variety of...

Four sources of bias in the Consumer Prices Index (CPI) have been identified. The most discussed is substitution bias, which creates a second order bias in the CPI. Three other changes besides prices changes create first order effects on a correctly measured cost of living index (COLI). (1)...

We propose a method for constructing price indices when retailers use periodic sales to price-discriminate amongst heterogeneous customers. To do so, we introduce a model in which Loyal customers buy one brand and do not strategically time purchases, while Bargain Hunters always pay the lowest...

The paper is an extensive review of chapter 16 in the System of National Accounts, 1993 written by Peter Hill. The basic principles for measuring price and quantity change in the National Accounts are explained. The paper also presents some new material on the consistency of superlative indexes...

The debate over including asset prices in the construction of an inflation statistic has attracted renewed attention in recent years. Virtually all of this (and earlier) work on incorporating asset prices into an aggregate price statistic has been motivated by a presumed, but unidentified...