Magazine article New Zealand Management

CPI Error. (Letters)

Magazine article New Zealand Management

CPI Error. (Letters)

Article excerpt

Bob Edlin's comments on the CPI in your August edition are incorrect. Statistics New Zealand does systematically adjust price changes to take account of improvements or reductions in the quality of commodities being priced in all cases where there are robust and cost-effective methods of doing this. These range from quite simple proportionate adjustments where the size or weight of a standard unit like a bottle of beer changes, through to complex "regression" techniques used with whiteware and used cars.

Bob Edlin's point about CPI error is well known and widely researched internationally. Moreover there are more sources of CPI error than just the quality bias that he refers to, and no country would pretend that its CPI was a perfect measure of change in the "true" cost of living.

The challenge for Statistics New Zealand, as for all statistical offices, is to maintain an index that people trust as a measure of price change that is fit for the principal purposes for which it is used. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.