Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266680 
Year of Publication: 
2022
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 45/2022
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
The present paper shows that product-specific regional price dispersion usually causes the Country-Product-Dummy (CPD) method to be biased. In cases where it is not, this index number method is still inefficient and inference is invalid. In view of this, a nonlinear generalization of the CPD method has been developed. This NLCPD method can be employed at all levels of aggregation and allows for inference. A comprehensive simulation reveals that the NLCPD method's root mean squared error is smaller than that of the CPD method, even in cases where the latter is unbiased. Finally, this paper applies the NLCPD method to regional price information derived from Germany's consumer price index micro data. Price levels of the 401 German districts are computed.
Subjects: 
multilateral price index
regional price levels
CPD method
measure-ment bias
JEL: 
C43
E31
ISBN: 
978-3-95729-924-6
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.