Why elementary price index number formulas differ: Evidence on price dispersion

Most countries use either the Dutot or Jevons index number formula for the compilation of their consumer price index at the elementary level of aggregation. The difference between the formulas is shown to be accounted for by changes in price dispersion. In turn, some of this difference is shown to be explained by product heterogeneity. Scanner data on television sets (TVs) are used to calculate Dutot and Jevons indexes. The difference between them is successfully explained in terms of changes in price dispersion and much reduced using an hedonic, heterogeneity-controlled Dutot index.     

A theory of hyperfinite processes: the complete removal of individual uncertainty via exact LLN

The aim of this paper is to provide a viable measure–theoretic framework for the study of random phenomena involving a large number of economic entities. The work is based on the fact that processes which are measurable with respect to hyperfinite Loeb product spaces capture the limiting behaviors of triangular arrays of random variables and thus constitute the `right' class for general stochastic modeling. The primary concern of the paper is to characterize those hyperfinite processes satisfying the exact law of large numbers by using the basic notions of conditional expectation, orthogonality, uncorrelatedness and independence together with some unifying multiplicative properties of random variables. The general structure of the processes is also analyzed via a biorthogonal expansion of the Karhunen–Loéve type and via the representation in terms of the simpler hyperfinite Loeb counting spaces. A universality property for atomless Loeb product spaces is formulated to show the abundance of processes satisfying the law. Generalizations to a hyperfinite number of continuous (or discrete) parameter stochastic processes are considered. The various necessary and sufficient conditions for the validity of the law provide a rather complete understanding about the cancelation of individual risks or uncertainty in general settings. Some explicit asymptotic interpretations are also given.     

三角模糊数下的综合评判法对城市旅游竞争力研究

模糊综合评判是将综合评判过程中的评价目标看成是由多种因素组成的模糊集合(称为因素集u),再设定这些因素所能选取的评审等级,组成评语的模糊集合(称为评判集v),分别求出各单一因素对各个评审等级的归属程度(称为模糊矩阵),然后根据各个因素在评价目标中的(语言)价值变量对其进行权重分配,经过模糊数计算(模糊矩阵合成)求出评价值.文章采用模糊综合评判的方法结合三角模糊数,对城市旅游竞争力进行实证评价,将模糊数学理论运用到旅游管理体系中.     

Measurement Biases in Consumer Price Indexes

The Consumer Price Index (CPI) measures the cost of purchasing a fixed basket of goods at a fixed sample of outlets over time, and can be thought of as a practical approximation to a "true" cost-of-living index, and a measure of general inflation for the economy. In more recent times, concerns over the possibility that the U.S. CPI overstates the rate of inflation have grown. Annual changes in the CPI are used to adjust social security benefits, and wage contracts are often indexed to CPI changes. To the extent that the CPI overstates the rate of inflation individuals are being compensated for changes in the cost-of-living that have not occurred–with enormous implications for government fiscal budgets. This paper presents an up-to-date survey of the principal sources of measurement error or bias in the CPI. A number of sources of bias are examined, including the commodity substitution bias , the outlet substitution bias , and the elementary index bias . Traditional bilateral index number theory assumes that the number of goods remains constant over the pricing period and furthermore, that the goods are of unchanging quality. Changes in either of these give rise to two further biases: the new goods bias and the quality bias .     

MEASUREMENT AND DETERMINANTS OF MULTI-FACTOR PRODUCTIVITY: A SURVEY OF LITERATURE

This paper surveys and synthesizes fast-growing literature on the measurement and determinants of multi-factor productivity (MFP). We identify three strands of the literature to measure MFP: the first is growth accounting, which decomposes observed economic growth into the contribution of factor inputs and technological change, called the Solow Residual; the second is index number methods, accompanied by frontier techniques; the third is growth regressions and econometric methods used to estimate productivity across countries and regions. We keep our focus on assessing the major strengths and weaknesses of commonly used methods for MFP measurement and categorize existing literature on the determinants of MFP growth into macroeconomic and institutional factors. We attempt to provide a reassessment and thematic survey of literature on the drivers of aggregate productivity, enabling policymakers to formulate effective economic policy.     

Tercentenary of Ars Conjectandi (1713): Jacob Bernoulli and the Founding of Mathematical Probability

The Tercentenary of the publication of Jacob Bernoulli's Ars Conjectandi (The Art of Conjecturing) provides an opportunity to look at the origins of mathematical probability from Jacob Bernoulli's point of view. Bernoulli gave a mathematically rigorous proof of what has come to be called the weak law of large numbers, relevant to discovering ratios of unknown factors through sampling. The Art of Conjecturing was a bridge between the mathematics of expectation in games of chance as found in Huygens's On Reckoning in Games of Chance and mathematical probability as found in Abraham De Moivre's The Doctrine of Chances. This paper looks at the conceptual context as well as the mathematics of Bernoulli's book.     

The effects of romantic motives on numerical preferences

The current research considers whether romantic pair-bond motivations influence numerical preferences. Across cultures and throughout history, the number “2” has been symbolic of a romantic pair bond. We propose that reminders of romance lead people to prefer the number “2” and other associated even numbers. A series of studies demonstrate that romantic motives—goals related to forming a romantic pair-bond—increase preference for the number “2” and other numbers of its parity (i.e., even vs. odd numbers) as well as marketing stimuli featuring even (vs. odd) numbers. This effect is specific to romantic motives and does not occur for motives related to other social relationships, such as work relationships, kinship, and friendship. Consistent with the motivational perspective, the desire to form a romantic relationship statistically mediates the effect of romantic cues on preference for even numbers. Subsequently, the effect of romantic motives on preference for even (vs. odd) numbers are suppressed when the focal goal has been already achieved (i.e., having a romantic relationship) or when an individual endorses a promiscuous lifestyle (i.e., having multiple partners simultaneously).     

Magic odd numbers: The effect of numerical parity on variety-seeking

Numbers are widely employed to convey product and other marketing related information and thereby influence consumer judgment and behavior. Drawing on the literature of numerical cognition, associative learning, goal activation, and variety-seeking, the current research examines how numerical parity affects consumers' variety-seeking behavior. Across one Implicit Association Test (IAT) and four experiments, we demonstrate that consumers associate odd (vs. even) numbers with changeability (vs. stability) in their minds (Study 1). We further find that exposure to product and other marketing related information that is presented with odd (vs. even) numbers increases consumers' tendency to seek variety in subsequent purchase decisions, and that this effect consistently appears in the voluntary selection of a set of options (Study 2a), the preference for diversified products (Study 2b and 3), and the choice of diversified product bundles (Study 2c). We further demonstrate that desire for change underlines this effect, such that exposure to odd numbers (vs. even numbers) activates consumers' desire for change, which in turn elevates their subsequent variety-seeking behavior (Study 3). The findings of the current research not only contribute to the literature, but also provide marketers with effective ways to facilitate consumers' variety-seeking behavior, such as by strategically using odd numbers in their marketing efforts.     

An Implicit Törnqvist Index of Real GDP

Recently much attention has been devoted to superlative indexes in the context of the national accounts. In this paper we advocate the use of the implicit Törnqvist quantity index to measure real GDP. This index, which has been proposed by Diewert and Morrison (1986), has never received serious consideration in the literature. Yet, compared to the better-known Fisher index, the implicit Törnqvist index of real GDP has a number of advantages. Thus, it can be shown to be exact for the Translog GDP function, it allows for a complete multiplicative decomposition of nominal and real GDP, and it is consistent with state-of-the-art measures of total factor productivity that typically rely on the Törnqvist aggregation. Estimates for a sample of 26 countries are reported. We find that the Laspeyres quantity index still used by the statistical agencies of most countries tends to underestimate real growth. Over the 1960–1996 period, the cumulated shortfall was as much as 13.4% of GDP in the case of Japan.     

Telephone number distribution: a snapshot at the beginning of 2000

The United States is depleting its stock of telephone numbers for assignment to telecommunications carriers. If current trends continue the industry could run out of numbers as soon as 2015. There is little empirical examination of this problem in the economics literature. This analysis examines the distribution of telephone numbers across the United States and quantifies the effects of several key factors. The authors examine the effects that population density, competition for local telephone service, wireless telephone service provision and rate exchange area consolidation have on telephone number assignment.