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CIRCULARITY

Statistics Directorate    
Definition:
An index number property such that the algebraic product of the price index comparing period j with period i and the price index comparing period k with period j is equal to the price index that compares period k directly with period i.

The property is also known as “transitivity”. When the axiomatic approach is used, a price index number may be required to satisfy the “circularity test”.

Source Publication:
ILO, IMF, OECD, Eurostat, UNECE, World Bank, 2004, Producer Price Index Manual: Theory and Practice, International Monetary Fund, Washington DC.

Cross References:
Transitivity (in international comparisons)

Hyperlink:
http://www.imf.org/external/np/sta/tegppi/index.htm

Statistical Theme: Prices and purchasing power partities

Created on Thursday, February 06, 2003

Last updated on Friday, July 08, 2005