This paper provides new evidence on the relationship between relative price variability and infla... more This paper provides new evidence on the relationship between relative price variability and inflation. The model uses a consistently defined data set for nine European countries. It benefits from the inclusion and testing of the effects of macroeconomic variables and the incorporation into the measures of inflation and dispersion adjustments for timeliness, appropriate formulas, and proximity. The general findings of
Statistical offices use ,the matched ,models ,method ,to compile ,consumer ,price indices (CPIs) ... more Statistical offices use ,the matched ,models ,method ,to compile ,consumer ,price indices (CPIs) to measure,inflation. Price collectors record the prices of a ,sample ,of models ,or varieties of selected products existing in period t,and then continue to record the prices of these same matched models in subsequent,periods t+n. The matched,models,method,is designed,to control for quality changes,by ensuring that like is
Abstract This paper considers the methods,of quality adjustment in the compilation of consumer pr... more Abstract This paper considers the methods,of quality adjustment in the compilation of consumer price indices (CPIs) which arises when a variety is no longer available and a matched,comparison oflike with like cannot take place. In such cases an implicit or explicit quality adjustment is necessary so that the price comparison,of the new variety with the old variety is not marred byquality,differences. A replication of CPI procedures is attempted ,on scanner ,data. This uses implicit and explicit quality adjustment procedures for non-comparable replacements, fifteen different methods in all, and compares the results. Implicit imputations have the effect ofdegrading,the sample ,as price ,changes in the ,existing sample ,are used to impute ,price changes of missing,varieties. The related issue of more,frequent sample rotation is thus also explored. The limitations of the data for this analysis are recognised, but it is nonetheless hoped that it will be useful,exploratory device for gain...
This paper outlines the potential use of bar-code scanner data from retailers for the measurement... more This paper outlines the potential use of bar-code scanner data from retailers for the measurement of in¯ation. The source bene®ts from its extensive coverage in providing data on prices, quantities and values of transactions of each model of a good sold. Relative weights can thus be ascribed to price changes in both base and current months at a highly detailed level which allows us to estimate substitution bias. Methods of adjusting for quality changes can be considered. The dummy variable hedonic approach is compared with a superlative, exact hedonic approach and a matching technique akin to that used by statistical of®ces.
This paper uses scanner data to generate estimates of quality-adjusted price changes for video-re... more This paper uses scanner data to generate estimates of quality-adjusted price changes for video-recorders. We use hedonic regressions to derive estimates of the changing worth of each quality component. These are then applied to weighted changes in the mix of quality attributes of products to derive estimates of qualityadjusted price (QAP) changes. The data source used is electronic-point-of-sale (EPOS) scanner data that are available for a wide range of goods. This study provides an example of how such methods can be more widely applied. The estimates of QAP changes correspond to constant-utility,`hedonic' cost-of-living indexes defined in economic theory as the ratio of expenditure functions at constant utility allowing for changing prices and characteristics of goods. This method is proposed as an improvement on the existing direct method, which takes its estimates directly from the coefficients associated with`time dummies' in a hedonic regression. We finally undertake a matching process, akin to that used by statistical offices, and compare the results. Direct comparisons with RPI estimates and these hedonic approaches are not easy since the approaches use quite different data sets. Our replication of a procedure akin to that used for the RPI on the scanner data set provides insights into sources of potential bias.
This paper is concerned with the meaning and measurement of potential productivity. Potential pro... more This paper is concerned with the meaning and measurement of potential productivity. Potential productivity is the difference between the actual and most efficient (optimal) productivity level. A number of concepts of potential productivity are outlined and their managerial implications discussed. Measures based on operating and lost time, peak output levels, estimating a capacity production function and work study (percentage utilisation of labour) are compared for the envelope-making division of a UK manufacturing company.
We consider three approaches to estimating quality-adjusted price changes: (i) the dummy variable... more We consider three approaches to estimating quality-adjusted price changes: (i) the dummy variable approach from a hedonic regression, (ii) a superlative or exact hedonic index and (iii) a matching technique-a technique akin to that used by statistical offices. The dummy variable approach is prevalent in the literature and has been used for independent estimates of quality changes when commenting on sources of error in consumer price indexes. However, the availability of scanner data provides an opportunity to utilize data on the prices (unit values), volumes and quality characteristics of a much wider range of transactions and to consider methods less restrictive than the dummy variable approach. The practical use of superlative or exact hedonic index and matching techniques using scanner data is explored, and the results from all three methods are compared. A feature of the paper is the breadth of the empirical work. It not only encompasses three different approaches, but extends across four different types of consumer durables. The manner in which the three approaches relate to each other is explored and the implications for quality-adjusted price changes is discussed.
Profit-maximizing price conditions are well established in economic theory. However, less attenti... more Profit-maximizing price conditions are well established in economic theory. However, less attention has been directed to the effect on profits of deviations in price from the profit maximizing position. The conditions governing the emergence of a flat-maximum principle are established for both an absolute and relative concept of flatness.
Journal of the Royal Statistical Society: Series D (The Statistician), 1999
This paper develops a model of the volatility of consumer purchase behaviour and applies the mode... more This paper develops a model of the volatility of consumer purchase behaviour and applies the model to the market for tea by using Nielsen scanner panel data. The distinction between volatility and switching between brands is outlined and a measure of the volatility of purchase behaviour is related to the extent of switching, purchase intensity, product characteristics and demographic characteristics of the panel members. A Heckman two-stage probit estimator is used to provide consistent estimates of the model's parameters, the results being encouraging.
This paper provides new evidence on the relationship between relative price variability and infla... more This paper provides new evidence on the relationship between relative price variability and inflation. The model uses a consistently defined data set for nine European countries. It benefits from the inclusion and testing of the effects of macroeconomic variables and the incorporation into the measures of inflation and dispersion adjustments for timeliness, appropriate formulas, and proximity. The general findings of
This paper provides new evidence on the relationship between relative price variability and infla... more This paper provides new evidence on the relationship between relative price variability and inflation. The model uses a consistently defined data set for nine European countries. It benefits from the inclusion and testing of the effects of macroeconomic variables and the incorporation into the measures of inflation and dispersion adjustments for timeliness, appropriate formulas, and proximity. The general findings of
Statistical offices use ,the matched ,models ,method ,to compile ,consumer ,price indices (CPIs) ... more Statistical offices use ,the matched ,models ,method ,to compile ,consumer ,price indices (CPIs) to measure,inflation. Price collectors record the prices of a ,sample ,of models ,or varieties of selected products existing in period t,and then continue to record the prices of these same matched models in subsequent,periods t+n. The matched,models,method,is designed,to control for quality changes,by ensuring that like is
Abstract This paper considers the methods,of quality adjustment in the compilation of consumer pr... more Abstract This paper considers the methods,of quality adjustment in the compilation of consumer price indices (CPIs) which arises when a variety is no longer available and a matched,comparison oflike with like cannot take place. In such cases an implicit or explicit quality adjustment is necessary so that the price comparison,of the new variety with the old variety is not marred byquality,differences. A replication of CPI procedures is attempted ,on scanner ,data. This uses implicit and explicit quality adjustment procedures for non-comparable replacements, fifteen different methods in all, and compares the results. Implicit imputations have the effect ofdegrading,the sample ,as price ,changes in the ,existing sample ,are used to impute ,price changes of missing,varieties. The related issue of more,frequent sample rotation is thus also explored. The limitations of the data for this analysis are recognised, but it is nonetheless hoped that it will be useful,exploratory device for gain...
This paper outlines the potential use of bar-code scanner data from retailers for the measurement... more This paper outlines the potential use of bar-code scanner data from retailers for the measurement of in¯ation. The source bene®ts from its extensive coverage in providing data on prices, quantities and values of transactions of each model of a good sold. Relative weights can thus be ascribed to price changes in both base and current months at a highly detailed level which allows us to estimate substitution bias. Methods of adjusting for quality changes can be considered. The dummy variable hedonic approach is compared with a superlative, exact hedonic approach and a matching technique akin to that used by statistical of®ces.
This paper uses scanner data to generate estimates of quality-adjusted price changes for video-re... more This paper uses scanner data to generate estimates of quality-adjusted price changes for video-recorders. We use hedonic regressions to derive estimates of the changing worth of each quality component. These are then applied to weighted changes in the mix of quality attributes of products to derive estimates of qualityadjusted price (QAP) changes. The data source used is electronic-point-of-sale (EPOS) scanner data that are available for a wide range of goods. This study provides an example of how such methods can be more widely applied. The estimates of QAP changes correspond to constant-utility,`hedonic' cost-of-living indexes defined in economic theory as the ratio of expenditure functions at constant utility allowing for changing prices and characteristics of goods. This method is proposed as an improvement on the existing direct method, which takes its estimates directly from the coefficients associated with`time dummies' in a hedonic regression. We finally undertake a matching process, akin to that used by statistical offices, and compare the results. Direct comparisons with RPI estimates and these hedonic approaches are not easy since the approaches use quite different data sets. Our replication of a procedure akin to that used for the RPI on the scanner data set provides insights into sources of potential bias.
This paper is concerned with the meaning and measurement of potential productivity. Potential pro... more This paper is concerned with the meaning and measurement of potential productivity. Potential productivity is the difference between the actual and most efficient (optimal) productivity level. A number of concepts of potential productivity are outlined and their managerial implications discussed. Measures based on operating and lost time, peak output levels, estimating a capacity production function and work study (percentage utilisation of labour) are compared for the envelope-making division of a UK manufacturing company.
We consider three approaches to estimating quality-adjusted price changes: (i) the dummy variable... more We consider three approaches to estimating quality-adjusted price changes: (i) the dummy variable approach from a hedonic regression, (ii) a superlative or exact hedonic index and (iii) a matching technique-a technique akin to that used by statistical offices. The dummy variable approach is prevalent in the literature and has been used for independent estimates of quality changes when commenting on sources of error in consumer price indexes. However, the availability of scanner data provides an opportunity to utilize data on the prices (unit values), volumes and quality characteristics of a much wider range of transactions and to consider methods less restrictive than the dummy variable approach. The practical use of superlative or exact hedonic index and matching techniques using scanner data is explored, and the results from all three methods are compared. A feature of the paper is the breadth of the empirical work. It not only encompasses three different approaches, but extends across four different types of consumer durables. The manner in which the three approaches relate to each other is explored and the implications for quality-adjusted price changes is discussed.
Profit-maximizing price conditions are well established in economic theory. However, less attenti... more Profit-maximizing price conditions are well established in economic theory. However, less attention has been directed to the effect on profits of deviations in price from the profit maximizing position. The conditions governing the emergence of a flat-maximum principle are established for both an absolute and relative concept of flatness.
Journal of the Royal Statistical Society: Series D (The Statistician), 1999
This paper develops a model of the volatility of consumer purchase behaviour and applies the mode... more This paper develops a model of the volatility of consumer purchase behaviour and applies the model to the market for tea by using Nielsen scanner panel data. The distinction between volatility and switching between brands is outlined and a measure of the volatility of purchase behaviour is related to the extent of switching, purchase intensity, product characteristics and demographic characteristics of the panel members. A Heckman two-stage probit estimator is used to provide consistent estimates of the model's parameters, the results being encouraging.
This paper provides new evidence on the relationship between relative price variability and infla... more This paper provides new evidence on the relationship between relative price variability and inflation. The model uses a consistently defined data set for nine European countries. It benefits from the inclusion and testing of the effects of macroeconomic variables and the incorporation into the measures of inflation and dispersion adjustments for timeliness, appropriate formulas, and proximity. The general findings of
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Papers by Mick Silver