Elementary Aggregates, Micro-indices and Scanner Data: Some Issues in the Compilation of Consumer Price Indices.

This paper argues for the use of scanner data from EPOS systems for use in the compilation of consumer price indices. A number of methods of calculating micro-indices from such data are outlined. Scanner data for color television sets in the United Kingdom are used as an example. The Tornqvist chained index is used as a benchmark against which alternative formulations, including those based on representative products, can be judged, the errors often being substantial. The paper argues for the use of scanner data, illustrates methods of compiling micro-indices, and points to the potential for serious errors from conventional methods. Copyright 1995 by The International Association for Research in Income and Wealth.