Should Exact Index Numbers Have Standard Errors?

Robert C. Feenstra and Marshall B. Reinsdorf

in Hard-to-Measure Goods and Services

Published by University of Chicago Press

Published in print November 2007 | ISBN: 9780226044491
Published online February 2013 | e-ISBN: 9780226044507 | DOI:
Should Exact Index Numbers Have Standard Errors?

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This chapter examines the relatively neglected issue of estimating sample variance in the context of constructing exact index numbers. Published index numbers are rarely accompanied by an indicator of variability, and it is thus difficult to assess whether a new estimate is significantly different from the previous one. The chapter applies the analysis to the specific case of total factor productivity (TFP) indexes, and examines the question of whether TFP growth in Singapore has been negative or positive, which has become an issue of considerable controversy.

Keywords: sample variance; index numbers; total factor productivity; Singapore

Chapter.  12906 words.  Illustrated.

Subjects: Microeconomics

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