Online Price Index with Product Replacement: The Closest-Match Approach

Bertolotto, Manuel I.

doi:10.2139/ssrn.3296073

Cited by 2 publications

(2 citation statements)

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“…This means that a price change of an identical item, occurring along with a change in the scanner data barcode of that item, would not be captured by the unit value (von Auer, 2016). Machine learning techniques may help solve that problem (Chessa, 2019a;Bertolotto, 2019). 102 These biases typically increase over time and can occur for fixed weight indices chained and reweighted at a high frequency as well as for chain-linked superlative indices with monthly weights (de Haan and van der Grient, 2009;von Auer, 2019).…”

Section: Quality Adjustment Biasmentioning

confidence: 99%

“…107 If implicit methods are used in situations when their underlying assumptions are not met or if explicit methods are not correctly specified(Boskin et al, 1996, p. 27). Further examples can be found inSchultze (2003),Dalén and Tarassiouk (2013),Keating and Murtagh (2018),Goldhammer et al (2019) andBertolotto (2019).108 For an overview, seeDESTATIS (2009), Chapter 5, pp. 29-43, and Eurostat (2018), Chapter 6, pp.…”

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confidence: 99%

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Inflation Measurement and its Assessment in the Ecb's Monetary Policy Strategy Review

et al. 2021

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This paper -which takes into consideration overall experience with the Harmonised Index of Consumer Prices (HICP) as well as the improvements made to this measure of inflation since 2003 -finds that the HICP continues to fulfil the prerequisites for the index underlying the ECB's definition of price stability. Nonetheless, there is scope for enhancing the HICP, especially by including owneroccupied housing (OOH) using the net acquisitions approach. Filling this longstanding gap is of utmost importance to increase the coverage and cross-country comparability of the HICP. In addition to integrating OOH into the HICP, further improvements would be welcome in harmonisation, especially regarding the treatment of product replacement and quality adjustment. Such measures may also help reduce the measurement bias that still exists in the HICP. Overall, a knowledge gap concerning the exact size of the measurement bias of the HICP remains, which calls for further research. More generally, the paper also finds that auxiliary inflation measures can play an important role in the ECB's economic and monetary analyses. This applies not only to analytical series including OOH, but also to measures of underlying inflation or a cost of living index.

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Section: Quality Adjustment Biasmentioning

confidence: 99%

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confidence: 99%