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ECONOMIC APPROACH

Statistics Directorate    
Definition:
The approach to index number theory that assumes that the observed price and quantity data are generated as solutions to various economic optimization problems. The quantities are assumed to be functions of the prices and not independent variables.

Also known as the “micro-economic approach”.

Context:
In the CPI context, the economic approach usually requires the CPI to be some kind of cost of living index.

ILO, IMF, OECD, Eurostat, UNECE, World Bank, 2004, Consumer Price Index Manual: Theory and Practice, International Labour Office, Geneva

http://www.ilo.org/public/english/bureau/stat/guides/cpi/index.htm.

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