Using Scanner Data in Consumer Price Indexes Some Neglected Conceptual Considerations

Jack E. Triplett

in Scanner Data and Price Indexes

Published by University of Chicago Press

Published in print February 2002 | ISBN: 9780226239651
Published online February 2013 | e-ISBN: 9780226239668 | DOI:
Using Scanner Data in Consumer Price Indexes Some Neglected Conceptual Considerations

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This chapter illustrates how consumer shopping behavior can dramatically alter the true price paid relative to what a price index based on survey sampling might measure. Some problems that arise in using scanner data in the consumer price index (CPI) are evaluated. Cost-of-living index (COLI) theory rests on a theory of an individual consumer's behavior. Explorations of scanner data, and indeed of methods for calculating component indexes of the CPI, have mostly used standard index number formulas from the existing price index literature, applied to store data. Price indexes calculated using scanner data always appear to differ from the CPI. Moreover, acquisitions and consumption periodicities differ, and the period-to-period store prices diverge from households' acquisitions and consumption prices in ways that depend on their inventory and shopping behaviors. Better classifications in the CPI are needed in order to have CPI component indexes that are suitable for economic analysis.

Keywords: consumer price index; shopping behavior; cost-of-living index; scanner data; store data; acquisitions; consumption prices; inventory; households

Chapter.  4913 words. 

Subjects: Econometrics and Mathematical Economics

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