Fisher Ideal Index Reformulated

N. T. Jazairi

doi:10.2307/1402705

Fisher Ideal Index Reformulated

International Statistical Review ◽

10.2307/1402705 ◽

1972 ◽

Vol 40 (1) ◽

pp. 47 ◽

Cited By ~ 8

Author(s):

N. T. Jazairi

Keyword(s):

Fisher Ideal Index

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Elementary Index Bias: Evidence for the Euro Area from a Large Scanner Dataset

German Economic Review ◽

10.1111/geer.12182 ◽

2019 ◽

Vol 20 (4) ◽

pp. e618-e656

Author(s):

Enikő Gábor-Tóth ◽

Philip Vermeulen

Keyword(s):

Euro Area ◽

Product Category ◽

Scanner Data ◽

Product Categories ◽

Percentage Points ◽

Price Indexes ◽

Substitution Bias ◽

Upper Level ◽

Index Formulas ◽

Fisher Ideal Index

Abstract We provide evidence on the effect of elementary index choice on inflation measurement in the euro area. Using scanner data for 15,844 individual items from 42 product categories and 10 euro area countries, we compute product category level elementary price indexes using eight different elementary index formulas. Measured inflation outcomes of the different index formulas are compared with the Fisher ideal index to quantify elementary index bias. We have three main findings. First, elementary index bias is quite variable across product categories, countries and index formulas. Second, a comparison of elementary index formulas with and without expenditure weights shows that a shift from price only indexes to expenditure weighted indexes would entail at the product level multiple percentage points differences in measured price changes. And finally, we show that elementary index bias is quantitatively more important than upper level substitution bias.

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