On the Construction of Price Indexes


On the Construction of Price Indexes By Diane F. Primont ABSTRACT This paper discusses some important issues in constructing price indexes for fish. One set of issues relates to the choice of an index number formula. Which is a "good" index number formula for aggregating prices? A variety of alternative index number formulae are explored based on the economic approach, the test (axiomatic) approach, etc. The other set of issues, which relate to the handling of seasonality in prices or quantities, arise in the presence of seasonal commodities. These are commodities that either (a) are available only during certain seasons of the year or (b) are available throughout the year but whose prices or quantities fluctuate in a seasonal pattern. How might a price index be constructed when some commodities are present in one period but not in the other? A number of methods are discussed. View Price Analysis and Demand Estimation Session View Full Paper (PDF file)

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