Retrospective Computations of Price Index Numbers: Theory and Application

Due to outdated weighting information, a Laspeyres‐based consumer price index (CPI) is prone accumulating upward bias. Therefore, the present study introduces and examines simple transparent revision approaches that retrospectively address source of They provide consistent long‐run time series CPI require no additional information. Furthermore, coherent decomposition bias into contributions individual product groups developed. In case study, are applied CPI. The empirical results confirm theoretical predictions. proposed adoptable not only most national CPIs but also other price‐level measures such as producer or import export indices.