Jeff Ralph, Rob O'Neill, Joe Winton

A Practical Introduction to Index Numbers (eBook, ePUB)

• Format: ePub

Produktbeschreibung

This book provides an introduction to index numbers for statisticians, economists and numerate members of the public. It covers the essential basics, mixing theoretical aspects with practical techniques to give a balanced and accessible introduction to the subject. The concepts are illustrated by exploring the construction and use of the Consumer Prices Index which is arguably the most important of all official statistics in the UK. The book also considers current issues and developments in the field including the use of large-scale price transaction data. A Practical Introduction to Index Numbers will be the ideal accompaniment for students taking the index number components of the Royal Statistical Society Ordinary and Higher Certificate exams; it provides suggested routes through the book for students, and sets of exercises with solutions.

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Produktdetails

• Verlag: John Wiley & Sons
• Seitenzahl: 232
• Erscheinungstermin: 17. Juni 2015
• Englisch
• ISBN-13: 9781118977798
• Artikelnr.: 43136733

Autorenporträt

Dr Jeff Ralph, Head of Index Number Methodology, Office for National Statistics, Cardiff, UK Mr Joe Winton, Statistical Training Unit, Office for National Statistics, Cardiff, UK Dr Robert O'Neill, Lecturer in Economics, University of Huddersfield, UK

Inhaltsangabe

Preface xi Acknowledgements xv 1 Introduction 1 1.1 What is an index
number? 1 1.2 Example - the Consumer Prices Index 2 1.3 Example - FTSE 100
5 1.4 Example - Multidimensional Poverty Index 6 1.5 Example - Gender
Inequality Index 6 1.6 Representing the world with index numbers 7 1.7
Chapter summary 8 References 8 2 Index numbers and change 9 2.1 Calculating
an index series from a data series 9 2.2 Calculating percentage change 11
2.3 Comparing data series with index numbers 13 2.4 Converting from an
index series to a data series 14 2.5 Chapter summary 16 Exercise A 17 3
Measuring inflation 19 3.1 What is inflation? 19 3.2 What are inflation
measures used for and why are they important? 20 3.2.1 Determination of
monetary policy by a central bank 21 3.2.2 Changing of provisions for
private pensions 21 3.2.3 Changes in amounts paid over long-term contracts
21 3.2.4 Changes in rail fares and other goods 22 3.2.5 Evaluating
investment decisions 22 3.2.6 Inputs to economic research and analysis 23
3.2.7 Index-linked debt 23 3.2.8 Tax allowances 23 3.2.9 Targets for
stability of the economy in an international context 23 3.3 Chapter summary
24 References 24 Exercise B 25 4 Introducing price and quantity 27 4.1
Measuring price change 27 4.2 Simple, un-weighted indices for price change
30 4.2.1 Simple price indices 30 4.2.2 Simple quantity indices 33 4.3
Price, quantity and value 34 4.4 Example - Retail Sales Index 35 4.5
Chapter summary 36 Exercise C 37 5 Laspeyres and Paasche indices 39 5.1 The
Laspeyres price index 40 5.2 The Paasche price index 41 5.3 Laspeyres and
Paasche quantity indices 43 5.4 Laspeyres and Paasche: mind your Ps and Qs
45 5.4.1 Laspeyres price index as a weighted sum of price relatives 45
5.4.2 Laspeyres quantity index as a weighted sum of quantity relatives 46
5.4.3 Paasche price index as a weighted harmonic mean of price relatives 46
5.4.4 Paasche quantity index as a weighted harmonic mean of quantity
relatives 46 5.5 Laspeyres, Paasche and the Index Number Problem 48 5.6
Laspeyres or Paasche? 49 5.7 A more practical alternative to a Laspeyres
price index? 51 5.8 Chapter summary 51 References 52 Exercise D 53 6
Domains and aggregation 55 6.1 Defining domains 55 6.2 Indices for domains
57 6.3 Aggregating domains 58 6.4 More complex aggregation structures 62
6.5 A note on aggregation structures in practice 62 6.6 Non-consistency in
aggregation 63 6.7 Chapter summary 63 Exercise E 64 7 Linking and
chain-linking 67 7.1 Linking 68 7.2 Re-basing 71 7.3 Chain-linking 74 7.4
Chapter summary 75 Exercise F 76 8 Constructing the consumer prices index
79 8.1 Specifying the index 79 8.2 The basket 80 8.3 Locations and outlets
81 8.4 Price collection 81 8.5 Weighting 81 8.6 Aggregation structure 82
8.7 Elementary aggregates 83 8.8 Linking 84 8.9 Owner occupier housing 85
8.10 Publication 85 8.11 Special procedures 86 8.12 Chapter summary 86
References 86 Exercise G 88 9 Re-referencing a series 89 9.1 Effective
comparisons with index numbers 89 9.2 Changing the index reference period
92 9.3 Why re-reference? 94 9.4 Re-basing 95 9.5 Chapter summary 96
References 96 Exercise H 97 10 Deflation 99 10.1 Value at constant price
101 10.2 Volume measures in the national accounts 102 10.3 Chapter summary
103 Exercise I 104 11 Price and quantity index numbers in practice 105 11.1
A big picture view of price indices 105 11.2 The harmonised index of
consumer prices 106 11.3 UK measures of consumer price inflation 107 11.4
PPI and SPPI 108 11.5 PPPs and international comparison 109 11.6 Quantity
indices 109 11.7 Gross domestic product 110 11.8 Index of Production 111
11.9 Index of services 112 11.10 Retail sales index 113 11.11 Chapter
summary 114 11.12 Data links 115 References 115 12 Further index formulae
119 12.1 Recap on price index formulae 119 12.2 Classifying price and
quantity index formulae 120 12.3 Asymmetrically weighted price indices 120
12.4 Symmetric weighted price indices 123 12.5 Un-weighted price indices
124 12.6 Different formulae, different index numbers 126 12.7 Chapter
summary 127 References 127 Exercise J 129 13 The choice of index formula
131 13.1 The index number problem 131 13.2 The axiomatic approach 133 13.3
The economic approach 134 13.4 The sampling approach 135 13.5 The
stochastic approach to index numbers 136 13.6 Which approach is used in
practice? 137 13.7 Chapter summary 138 References 138 Exercise K 140 14
Issues in index numbers 141 14.1 Cost-of-living versus cost-of-goods 141
14.2 Consumer behaviour and substitution 143 14.3 New and disappearing
goods 144 14.4 Quality change 145 14.4.1 Option 1: do nothing - pure price
change 146 14.4.2 Option 2: automatic linking - pure quality change 146
14.4.3 Option 3: linking 147 14.4.4 Option 4: imputation 147 14.4.5 Option
5: hedonics 147 14.5 Difficult to measure items 148 14.6 Chapter summary
149 References 149 15 Research topics in index numbers 151 15.1 The uses of
scanner data 151 15.1.1 Improvements at the lowest level of aggregation 152
15.1.2 Understanding consumer behaviour 152 15.1.3 Alternative measurement
schemes 153 15.1.4 Frequency of indices 153 15.2 Variations on indices 154
15.2.1 Regional indices 154 15.2.2 Variation by socio-economic group or
income quantile 154 15.3 Difficult items 155 15.3.1 Clothing 155 15.3.2 New
and disappearing goods 156 15.3.3 Hedonics 157 15.4 Chaining 157 15.5 Some
research questions 158 References 158 A Mathematics for index numbers 161
A.1 Notation 161 A.1.1 Summation notation 161 A.1.2 An alternative
representation 163 A.1.3 Geometric indices 164 A.1.4 Harmonic indices 164
A.2 Key results 165 A.2.1 The value ratio decomposition 165 A.2.2
Converting between the two forms of price and quantity indices 166 A.2.3
Other examples of the price-relative/weights 167 A.2.4 The value ratio as a
product of Fisher indices 167 A.3 Index Formula Styles 168 B Choice of
index formula 169 B.1 The axiomatic approach to index numbers 169 B.1.1 An
introduction to the axiomatic approach 169 B.1.2 Some axioms 170 B.1.3
Choosing an index based on the axiomatic approach 173 B.1.4 Conclusions 174
B.2 The economic approach to index numbers 174 B.2.1 The economic approach
to index numbers 174 B.2.2 A result on expenditure indices 177 B.2.3
Example 1: Cobb-Douglas and the Jevons index 179 B.2.4 Example 2: CES and
the Lloyd-Moulton index 181 B.2.5 Issues with the economic approach 183
References 184 C Glossary of terms and formulas 185 C.1 Commonly used terms
185 C.2 Commonly used symbols 189 C.3 Unweighted indices (price versions
only) 190 C.4 Weighted indices (price versions only) 191 D Solutions to
exercises 193 E Further reading 211 E.1 Manuals 211 E.2 Books 211 E.3
Papers 212 Index 213