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| Contributor | David Fenwick, Adrian Ball and Sukwinder Mehmi, Office for National Statistics, UK |
| Title of paper | Measuring trends in prices in a dynamic universe: issues raised by the new economy and how the UK Office for National Statistics is addressing these |
| Abstract | The dynamics of the market place and the accelerating pace of technological development represent a major challenge to the statistical measurement of the price evolution of goods and services purchased by consumers. To measure the target universe of transactions comprising the expenditure coverage of a price index is particularly problematic under a pure price approach such as the fixed basket Laspyres-type index, the most common mathematical form of a price index. Here the aim is to measure the change in a fixed basket of goods and services against a background where there is a dynamic turnover in the types of products on sale and of types of outlets from which products can be purchased. This raises a tension between keeping the basket fixed and ensuring that it is up-to-date and representative. A central measurement issue is the collection of adequate market information to inform the updating of product and outlet samples and the processes that need to be put in place for taking these retail market changes on board. Another central measurement issue is the treatment of ongoing quality developments of existing products and the proper incorporation of entirely new products and purchasing channels. Also raised is the specific treatment of new developments in the nature of the retail market, such as internet shopping, when set against measurement conventions that will have been drafted prior to the major changes in purchasing patterns seen over recent years. The paper reviews these issues in the context of the UK Retail Prices Index including a comparative evaluation of the UK Producer Price Index to investigate the scope for common solutions. It then presents some of the measurement options under consideration. |
| Full document | Measuring trends in prices in a dynamic universe: issues raised by the new economy and how the UK Office for National Statistics is addressing these |
This page last revised: Friday, 7 June 2002
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