A chained price index is said to suffer from chain drift bias if it indicates an overall price change, even though the prices and quantities in the current period have reverted back to their levels of the base period. The empirical relevance of this bias is well documented in studies that apply...

Textbooks of macroeconomics regularly remind their readers that they should not interpret the macroeconomic price variable as some sort of average price. Instead it represents some price index indicating the average of the individual items' price changes between the period considered and some...

Over the last three decades the supply of economic statistics has vastly improved. Unfortunately, statistics on regional price levels (sub-national purchasing power parities) have been exempt from this positive trend, even though they are indispensable for meaningful spatial comparisons of...

The import and export price indices of an economy are usually compiled by some Laspeyres type index. It is well known that such an index formula is prone to substitution bias. Therefore, also the terms of trade (ratio of export and import price index) are likely to be distorted. The underlying...

Various fields of economic analysis (e.g., growth and productivity) and economic policy (e.g., monetary and social policy) rely on accurate measures of price change. Unfortunately, the price index formulae that most price statisticians consider as particularly accurate - the superlative indices...

Our paper uses micro price data collected from Germany’s Consumer Price Index to compile a highly disaggregated regional price index for the 402 counties and cities of Germany. We introduce a multi-stage version of the weighted Country-Product- Dummy method. The unique quality of our price...