Econometrica Vol. 58 No. 1 1990
On Calculating Cost-of-Living Index Numbers for Arbitrary Income Levels
Abstract
A method for computing (approximate) cost-of-living index numbers for arbitrary reference income levels is presented. It combines the use of fairly disaggregated data with a relatively modest use of econometric methods. The basis ingredients are (1) a series of chained Tornqvist price index numbers relating to per capital total expenditure, (2) price index numbers for the commodities distinguished, and (3) the income parameters of a differential demand system. This method attains second order precision and is equivalent to a full econometric method based on a translog utility function. The method is demonstrated on Netherlands data for 1952-81.
- DOI
- 10.2307/2938335
- Volume
- 58
- Issue
- 1
- Pages
- 75
- Sources
- bibtex:phds-export.bib crossref openalex