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Title:Owner-occupied housing costs and bias in the Irish consumer price index PDF Logo
Authors:McCarthy, Colm
Issue Date:2007
Series/Report no.:Working paper series // UCD Centre for Economic Research 2007/07
Abstract:The treatment of owner-occupied housing costs is a recurring problem in the construction of consumer price indices, and there are competing methodologies. In the most widely-used Irish index, the Payments Approach, which attaches a weight to a term involving historical house prices and an interest rate, is used to measure these costs. It is argued that this has resulted in a substantial over-statement of inflation in recent quarters, and that the over-statement will continue for some time. The Irish version of Eurostat's Harmonised Index of Consumer Prices, recently running well below the CPI, is a more reliable guide. Few national statistical offices use the Payments Approach, and it is argued that the procedure used in Ireland should be reviewed.
Subjects:Consumer Price Index
Cost of Living Index
Payment Approach
Owner-Occupied Housing
JEL:C43
C82
D12
E31
Document Type:Working Paper
Appears in Collections:Working Paper Series, UCD School of Economics, University College Dublin (UCD)

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