Estimating regional price indices : an application to Austria

Abstract

"This paper presents studies from 2004 and 2005, which derived regional price indices for Austrian federal states and districts. Apart from the documentation of the results, the focus is on the statistical evaluation of the design of these studies. The paper examines whether results based on a limited sample of products are representative. We show that a price index estimator based on a basket consisting of nine goods and services explains 95 % of the variance of a price index based on 70 goods and services. Basket composition turns out to be important and selection based on a priori presumptions can be augmented by statistical tests. Our results stress the importance of housing costs for regional price levels. A second focus of the paper is on how to use a given database to optimize the design of future studies on regional price levels. We consider a situation with only two categories of goods and, therefore, a rather limited potential for changes in the design. However, we show that by optimally redesigning the survey compared to the original studies, one can achieve cost savings in the order of magnitude of 6 - 7 percent. Alternatively, one might achieve quality improvements in terms of the index variance for a given cost level." (Authors' abstract, IAB-Doku) ((en))

Cite article

Götz, G., Krauskopf, T. & Winker, P. (2010): Die Bestimmung regionaler Preisindizes. Das Beispiel Österreich. In: J. Möller, E. Hohmann & D. Huschka (Hrsg.) (2010): Der weiße Fleck - zur Konzeption und Machbarkeit regionaler Preisindizes (IAB-Bibliothek, 324), p. 353-392.