Constructing quality adjusted price indexes: a comparison of hedonic and discrete choice methods¤
نویسنده
چکیده
In 1996 the Boskin report (1996) discussed several types of measurement errors in the consumer price index (CPI). The CPI measures the cost of purchasing a ...xed market basket of goods and services. All the goods and services in this basket can be divided over classi...cation levels beginning with major groups like food and beverages, housing, transportation, etc. The CPI calculates the monthly changes (monthly in‡ation) in the total cost of this basket by aggregating the price indexes of its sub levels. Changes in the CPI are caused by changes in the prices of the products in this particular basket. The products and services in the basket and their expenditure share in the CPI are based on household surveys held in a certain base year t0: The CPI is not a true cost-of-living index (COLI). A true COLI compares the minimum expenditure required to achieve a same level of welfare (or utility) across two points in time. The Boskin committee concluded that the CPI overestimated the true in‡ation in the US by 1.1 percentage point. The conclusions of the
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