Decomposing the Changes of the Divisia Price Index: Application to Inflation in the Philippines

We propose a method to decompose the logarithmic change of the Divisia price index into the pure price effect, the prefernce effect and the substitution effect. Our empirical results in the Philippines shows the effects of preference change on the Divisia price index are heterogeneous but positive across all regions and income deciles. However, they are dominated by the pure price effect.

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Year of publication:	2011-03
Authors:	Fujii, Tomoki
Institutions:	School of Economics, Singapore Management University
Subject:	Divisia price index \| preference change \| decomposition \| Philippines

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Published in SMU Economics and Statistics Working Paper Series Number 06-2011 13 pages
Classification:	E31 - Price Level; Inflation; Deflation ; I32 - Measurement and Analysis of Poverty ; O10 - Economic Development. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009275442