The problem of new and disappearing commodities in the construction of price indexes

Lovell, C. A. Knox and Zieschang, Kimberly D. (1994). The problem of new and disappearing commodities in the construction of price indexes. In Abraham Charnes, William W. Cooper, Arie Y. Lewin and Lawrence M. Seiford (Ed.), Data envelopment analysis: theory, methodology, and application (pp. 353-368) Boston, United States: Kluwer Academic Publishers. doi:10.1007/978-94-011-0637-5_18


Author Lovell, C. A. Knox
Zieschang, Kimberly D.
Title of chapter The problem of new and disappearing commodities in the construction of price indexes
Title of book Data envelopment analysis: theory, methodology, and application
Place of Publication Boston, United States
Publisher Kluwer Academic Publishers
Publication Year 1994
Sub-type Research book chapter (original research)
DOI 10.1007/978-94-011-0637-5_18
Open Access Status Not Open Access
ISBN 9780792394808
9789401106375
Editor Abraham Charnes
William W. Cooper
Arie Y. Lewin
Lawrence M. Seiford
Chapter number 18
Start page 353
End page 368
Total pages 16
Total chapters 22
Language eng
Formatted Abstract/Summary
Important and frequently encountered problems in the production of price indexes are the appearance of new commodities that were unavailable when the item pricing sample was first designed, or the disappearance of commodities originally selected for inclusion in the index. There are several traditional methods for “splicing” old commodities out and/or new commodities in, and all hinge on some assumption about the comparability of the new or disappearing items with items continuously available for pricing throughout the period within which price comparisons are to be made. Included among these methods are

1. the link to show no change method, whereby a new item’s difference in price from an existing item is assumed to be entirely a result of the difference in quality

2. the cell relative method, whereby the price change of a new item at the point of its introduction (or an old item at the point of its disappearance) is assumed to be the same as that of a judgmentally selected group of similar goods

3. the resource cost method, whereby the difference in price of a new or disappearing variety with a continuing item is adjusted for quality by the relative costs of producing the two items; and

4. the hedonic method, whereby the difference in price of a noncontinuous variety from a continuous item is adjusted using a model-based statistical estimate of the difference in the market value of measured characteristics of the two items.
Q-Index Code B1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Book Chapter
Collection: School of Economics Publications
 
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Created: Thu, 31 Mar 2016, 16:52:44 EST by Karen Warren on behalf of School of Economics