JiscMail Logo
Email discussion lists for the UK Education and Research communities

Help for RADSTATS Archives


RADSTATS Archives

RADSTATS Archives


RADSTATS@JISCMAIL.AC.UK


View:

Message:

[

First

|

Previous

|

Next

|

Last

]

By Topic:

[

First

|

Previous

|

Next

|

Last

]

By Author:

[

First

|

Previous

|

Next

|

Last

]

Font:

Proportional Font

LISTSERV Archives

LISTSERV Archives

RADSTATS Home

RADSTATS Home

RADSTATS  February 2012

RADSTATS February 2012

Options

Subscribe or Unsubscribe

Subscribe or Unsubscribe

Log In

Log In

Get Password

Get Password

Subject:

Re: An economist opines (2)

From:

"K.J.Mcconway" <[log in to unmask]>

Reply-To:

K.J.Mcconway

Date:

Thu, 2 Feb 2012 17:51:31 +0000

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (60 lines)

I'm not sure this is "unacknowledged", at least by govt statisticians...

Quote from "The new inflation target: the statistical perspective", available at 
http://www.ons.gov.uk/ons/guide-method/method-quality/specific/economy/cpi-rpi/1998---2004/new-inflation-target.pdf (and written in 2003), pp 28-9:

"Therefore the RPI and the CPI do not measure 'the cost of living'. Avoiding value judgements about what constitutes a reasonable or minimum acceptable standard of living, a cost of living index can be defined as the minimum expenditure (or income) a consumer faced by rising prices requires to achieve the same level of utility as in some earlier period, relative to their expenditure (or income) in the earlier period. In this case, there is no assumption that relative quantities of goods and services purchased in the two periods are the same and so a cost of living index is conceptually quite different to fixed basket indices like the RPI and the CPI."

They do go on to say a bit about what the RPI and CPI do actually measure, though it's (inevitably I think) a bit vague.

However, I don't recall seeing any of this stuff raised in political discussions about uses of the RPI and/or CPI, though maybe I don't listen hard enough...

Kevin

-----Original Message-----
From: Wells, Julian [mailto:[log in to unmask]] 
Sent: 02 February 2012 15:49
To: [log in to unmask]
Subject: An economist opines (2)

The other thing that seems worth pointing out is that the existing system(s) appear to be an uneasy and unacknowledged compromise between two different objectives, namely

(1) constructing an index of prices

(2) constructing a measure of changes in well-being

Hence the ludicrous statements in mainstream textbooks to the effect that Paasche and Laspeyres indices  "over (under) estimate inflation".

What they actually approximate, more or less well, is changes in the neo-classical economists' fabled "utility".

This is a thoroughly tendentious concept of well-being which, in so far as it has any more content than "mysterious quality which makes people want to buy things" seems to amount to "ability to consume purchased commodities" -- from which follows the concern with substitution resulting from changes in *relative* prices.

There's an excellent introduction to all this in Chapter 4 of Himmelweit et al. (2001) "Microeconomics: neo-classical and institutionalist perspectives on economic behaviour".


Julian






This email has been scanned for all viruses by the MessageLabs Email Security System.

******************************************************
Please note that if you press the 'Reply' button your message will go only to the sender of this message.
If you want to reply to the whole list, use your mailer's 'Reply-to-All' button to send your message automatically to [log in to unmask]
Disclaimer: The messages sent to this list are the views of the sender and cannot be assumed to be representative of the range of views held by subscribers to the Radical Statistics Group. To find out more about Radical Statistics and its aims and activities and read current and past issues of our newsletter you are invited to visit our web site www.radstats.org.uk.
*******************************************************

-- 
The Open University is incorporated by Royal Charter (RC 000391), an exempt charity in England & Wales and a charity registered in Scotland (SC 038302).

******************************************************
Please note that if you press the 'Reply' button your
message will go only to the sender of this message.
If you want to reply to the whole list, use your mailer's
'Reply-to-All' button to send your message automatically
to [log in to unmask]
Disclaimer: The messages sent to this list are the views of the sender and cannot be assumed to be representative of the range of views held by subscribers to the Radical Statistics Group. To find out more about Radical Statistics and its aims and activities and read current and past issues of our newsletter you are invited to visit our web site www.radstats.org.uk.
*******************************************************

Top of Message | Previous Page | Permalink

JISCMail Tools


RSS Feeds and Sharing


Advanced Options


Archives

April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
2006
2005
2004
2003
2002
2001
2000
1999
1998


WWW.JISCMAIL.AC.UK

Secured by F-Secure Anti-Virus CataList Email List Search Powered by the LISTSERV Email List Manager