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AXIOMATIC APPROACH

Statistics Directorate    
Definition:
The approach to index number theory that determines the choice of index number formula on the basis of its mathematical properties.

A list of “tests” is drawn up that require an index to possess certain properties and the choice of index made on the basis of the number of tests satisfied. Not all tests may be considered equally important and the failure to satisfy certain key tests may be considered sufficient grounds for rejecting an index.

An important feature of the axiomatic approach is that prices and quantities are considered as separate variables and no account is taken of possible links between them.

Also known as the “test approach”.

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

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

Statistical Theme: Prices and purchasing power partities

Created on Monday, February 17, 2003

Last updated on Friday, July 08, 2005