6533b831fe1ef96bd1298dad
RESEARCH PRODUCT
Weighting Elementary Prices in Consumer Price Index Construction Using Spatial Autocorrelation
Jose Manuel Pavía-mirallesBeatriz Larraz-iribasGuido Ferrarisubject
Statistics and ProbabilityInflationComputer Science::Computer Science and Game TheorySpatial correlationmedia_common.quotation_subjectWeightingPrice indexStatisticsEconometricsConsumer price indexDimension (data warehouse)Spatial analysisArithmetic meanmedia_commonMathematicsdescription
The Consumer Price Indexes (CPI) are used in current economic systems to measure inflation. When constructing CPIs, however, official institutions have systematically overlooked the spatial dimension of elementary prices. Ignoring the fact that prices are collected at geographical locations implicitly implies considering prices as spatially independent, when in fact they are not. To solve this problem, this article proposes to weight basic price data by taking into account the spatial correlation they display. The weighted geometric and arithmetic means suggested generalize and improve the simple geometric and arithmetic means currently in use.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2013-12-17 | Communications in Statistics - Theory and Methods |