Lecture notes in the Theory and Applications of Economic Indices

COURSE SYLLABUS

Lecture 1. DECOMPOSING NOMINAL GROWTH RATES INTO PRICE AND QUANTITY INDEX NUMBERS

Lecture 2-1. AXIOMATIC APPROACH TO INDEX NUMBER THEORY

Lecture 2-2. AXIOMATIC APPROACH TO INDEX NUMBER THEORY, continued

Lecture 2-3. AXIOMATIC APPROACH TO INDEX NUMBER THEORY, continued

Lecture 3. STOCHASTIC APPROACH TO INDEX NUMBER THEORY

Lecture 4. ECONOMIC APPROACH TO INDEX NUMBER THEORY

Lecture 5. PRICE INDICES

Lecture 6. THE MEASUREMENT OF QUALITY-ADJUSTED PRICE CHANGES

Lecture 7. THE INDEX OF INDUSTRIAL PRODUCTION

Lecture 8. CHAIN INDICES

EXAMINATION PAPERS

RESOURCES AND MATERIALS USED IN SEMINARS

Test #1. According to the version of the test assigned to each student, calculate chain indices using the chain-linking method, or vice versa – convert the series of chained index numbers into an unchained series.

Exercise 1-1

Exercise 1-2

Exercise 1-3

Exercise 1-4

Test #2. According to the version of the test assigned to each student, calculate index number series, and verify numerically whether the resulting index numbers satisfy one or other of tests for index numbers. Here is the data required to calculate index numbers.

Exercise 2-1

Exercise 2-2

Exercise 2-3

Factor reversal test: explanation

Test #3. According to the version of the test assigned to each student, calculate the Sato – Vartia consumer price index representing all goods and services purchased for consumption. Here is the data required to calculate index numbers.

Out-of-class group assignment. The class will be divided into 5 teams of approximately 4 students each. For a set of products to be chosen by each team members, students should identify objectively measured characteristics of each product, prices of each product, and construct the regression equation relating the prices and characteristics. To access assignment instructions click here.