Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80767
Authors: 
Kryvtsov, Oleksiy
Year of Publication: 
2013
Series/Report no.: 
Bank of Canada Working Paper 2013-24
Abstract: 
Rising consumer prices may reflect shifts by consumers to new higher-priced products, mostly for durable and semi-durable goods. I apply Bils' (2009) methodology to newly available Canadian consumer price data for non-shelter goods and services to estimate how price increases can be divided between quality growth and price inflation. I find that less than one-third of observed price increases during model changeovers should be attributed to quality growth. This implies overall price inflation close to inflation measured by the official index. I conclude that, according to Bils' methodology, the quality bias is not an important source of potential mismeasurement of CPI inflation in Canada.
Subjects: 
Inflation and prices
Potential output
JEL: 
E31
M11
O47
Document Type: 
Working Paper

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