Getting Prices Right: What Should Be Done?
- 1 February 1998
- journal article
- Published by American Economic Association in Journal of Economic Perspectives
- Vol. 12 (1), 37-46
- https://doi.org/10.1257/jep.12.1.37
Abstract
Much of the profession accepts that the CPI likely overstates the rate of increase of the cost-of-living. It is less clear that there are sound and feasible steps that the BLS can adopt to improve matters in the short run. There are unresolved conceptual and identification problems in the measurement of quality. Superlative price indexes are not feasible, and feasible approximations are not superlative, and may not even be better. The need for a single index that aggregates over heterogeneous consumers with different incomes, tastes, and needs casts serious doubt on the cost-of-living approach.Keywords
This publication has 2 references indexed in Scilit:
- Addressing the Quality Change Issue in the Consumer Price IndexBrookings Papers on Economic Activity, 1997
- Whose Cost of Living?The Review of Economic Studies, 1959