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CPI Aggregation: A New Weighting Scheme


Affiliations
1 Department of Economics, North South University Dhaka, Bangladesh
 

Consumer Price Index (CPI) of a particular region is primarily calculated through aggregation of individual household observations. This aggregation is done following two schemes, plutocratic and democratic. While both of them are useful for certain purposes, none of them actually give proper attention to poor households. In this study, we have shown that weighting scheme with certain mathematical characteristics can actually produce CPI, which can represent poor households better and thus can be more useful for development-oriented policymaking.

Keywords

Consumer price index, Plutocratic, Democratic, Aggregation
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  • CPI Aggregation: A New Weighting Scheme

Abstract Views: 229  |  PDF Views: 75

Authors

A.F.M. Ataur Rahman
Department of Economics, North South University Dhaka, Bangladesh
Noor Md. Wasi Uddin
Department of Economics, North South University Dhaka, Bangladesh

Abstract


Consumer Price Index (CPI) of a particular region is primarily calculated through aggregation of individual household observations. This aggregation is done following two schemes, plutocratic and democratic. While both of them are useful for certain purposes, none of them actually give proper attention to poor households. In this study, we have shown that weighting scheme with certain mathematical characteristics can actually produce CPI, which can represent poor households better and thus can be more useful for development-oriented policymaking.

Keywords


Consumer price index, Plutocratic, Democratic, Aggregation