Approximating the Cost-of-Living Index for a Storable Good

• 成果类型: Article
• 署名作者: Osborne, Matthew
• 署名单位: University of Toronto; University Toronto Mississauga; University of Toronto; University Toronto Mississauga
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20140254
• 发表日期: 2018
• 页码: 286-314
• 关键词: bayesian-estimation; demand; models; PRODUCTIVITY; DYNAMICS; numbers; output; input; brand

摘要

This paper estimates a cost-of-living index using a dynamic structural model for two storable product categories. In each category, regime shifts to higher or lower retail prices are observed. Fixed-base indexes do a poor job of capturing changes in welfare after a regime shift, and deviate front the dynamic index by as much as 300 percent. I evaluate the extent to which two recently proposed indexes can approximate the model-derived index. These indexes improve welfare measurement and are straightforward to compute. The category's competitive structure and features of the regime shift determine which of the two provides a better approximation.