


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 “microeconomic 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.

Statistical
Theme: Prices and purchasing power partities 
Created
on Monday, February 17, 2003 
Last
updated on Friday, July 08, 2005 












