Index number theory: Difference between revisions
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* There are literally hundreds of price indices, so discovering them and writing about their properties takes some work. In at least one case (GEKS multilateral index), an index was independently rediscovered decades later, so this isn't trivial work. | * There are literally hundreds of price indices, so discovering them and writing about their properties takes some work. In at least one case (GEKS multilateral index), an index was independently rediscovered decades later, so this isn't trivial work. | ||
* There are various properties that indices can satisfy, and you can't have all of them, so you have to pick the right one for your situation; specifying this decision procedure takes some work | * There are various properties that indices can satisfy, and you can't have all of them, so you have to pick the right one for your situation; specifying this decision procedure takes some work | ||
* Practically, we want to have nice things like PPP tables ([[International Comparison Program]], [[Penn World Table]], [[Maddison Project]]), price level information, cost of living information, and so on. But having this stuff means you have to do the calculation in the first place, and the calculation requires that you have some sort of price index. | * Practically, we want to have nice things like PPP tables ([[International Comparison Program]], [[Penn World Table]], [[Maddison Project]]), price level information, cost of living information, and so on (and why do we want those things? because that's how you make certain decisions and learn about the world). But having this stuff means you have to do the calculation in the first place, and the calculation requires that you have some sort of price index. | ||
==Approaches== | ==Approaches== | ||
Revision as of 23:54, 10 November 2017
Index number theory is a field of economics that studies index numbers.
Names I keep seeing: Diewert, Balk, Summers, Heston, Geary, Khamis, Sergeev.
History
Why the field even exists
- There are literally hundreds of price indices, so discovering them and writing about their properties takes some work. In at least one case (GEKS multilateral index), an index was independently rediscovered decades later, so this isn't trivial work.
- There are various properties that indices can satisfy, and you can't have all of them, so you have to pick the right one for your situation; specifying this decision procedure takes some work
- Practically, we want to have nice things like PPP tables (International Comparison Program, Penn World Table, Maddison Project), price level information, cost of living information, and so on (and why do we want those things? because that's how you make certain decisions and learn about the world). But having this stuff means you have to do the calculation in the first place, and the calculation requires that you have some sort of price index.
Approaches
Some approaches to index number theory are:
- Axiomatic
- Test-based
- Stochastic?
See also
External links
References
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