| By: |
Diewert, Erwin;
Feenstra, Robert |
| Abstract: |
A major challenge facing statistical agencies is the problem of adjusting
price and quantity indexes for changes in the availability of commodities.
This problem arises in the scanner data context as products in a commodity
stratum appear and disappear in retail outlets. Hicks suggested a reservation
price methodology for dealing with this problem in the context of the economic
approach to index number theory. Feenstra and Hausman suggested specific
methods for implementing the Hicksian approach. The present paper evaluates
these approaches and suggests some alternative approaches to the estimation of
reservation prices. The various approaches are implemented using some scanner
data on frozen juice products that are available online. |
| Keywords: |
Hicksian reservation prices, virtual prices, Laspeyres, Paasche, Fisher, Törnqvist and Sato-Vartia |
| JEL: |
C33 C43 C81 D11 D60 E31 |
| Date: |
2018–07–26 |
| URL: |
http://d.repec.org/n?u=RePEc:ubc:pmicro:erwin_diewert-2018-7&r=mkt |