ELEMENTARY AGGREGATES, MICRO-INDICES AND SCANNER DATA: SOME ISSUES IN THE COMPILATION OF CONSUMER PRICE INDICES

The 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 colour television sets in the U.K. 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.