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.
Autorentext
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
Klappentext
From inflation and GDP to retail sales and share prices, many of the most important economic statistics are published as index numbers.
Official statistics based on index numbers are used by almost every country in the world. The representation of data in index numbers form is a valuable statistical technique for understanding and communicating change; it allows useful comparisons to be made that would not otherwise be possible. This book provides a comprehensive introduction to measuring change with index numbers.
Key features :
- Introduces the theoretical background to the subject including a description of the most commonly used price and quantity index formulae
- Covers the practical techniques needed when using index numbers, including chain linking and deflation
- Describes the application of index numbers with a focus on economic statistics, especially the general level of prices and inflation, as well as the wider application of the technique to both economic and non-economic spheres
- Reviews current issues and developments in the field
- Includes easy to follow examples and exercises with solutions
Written by authors with wide expertise in the practice and development of index numbers, A Practical Introduction to Index Numbers has been designed for students new to this subject, and will be an ideal accompanying text for those taking the Royal Statistical Society's Ordinary and Higher examinations. The book will also provide a valuable resource for users of Official Statistics who would like to enhance their knowledge of this important area.
Inhalt
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