TY - JOUR
T1 - Dynamic cost of living index for storable goods
AU - Ueda, Kozo
N1 - Funding Information:
This research was funded by the JSPS Grant-in-Aid for Scientific Research (Japan) (16KK0065) and Nomura Foundation, Japan (N19-2-E40). All remaining errors are my own.
Publisher Copyright:
© 2020 Elsevier B.V.
PY - 2020/4
Y1 - 2020/4
N2 - Consumers hold inventory for future uses. This study investigates how such intertemporal decisions influence the cost-of-living index (COLI). To this end, I construct a simple dynamic model, in which goods are storable and nonresalable, and prices take either high (regular price) or low values (sales), and then introduce two types of dynamic COLIs. I find that neither index satisfies both monotonicity and the time reversal test.
AB - Consumers hold inventory for future uses. This study investigates how such intertemporal decisions influence the cost-of-living index (COLI). To this end, I construct a simple dynamic model, in which goods are storable and nonresalable, and prices take either high (regular price) or low values (sales), and then introduce two types of dynamic COLIs. I find that neither index satisfies both monotonicity and the time reversal test.
KW - Chain drift
KW - Consumer inventory
KW - Cost-of-living index
KW - Price index
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U2 - 10.1016/j.econlet.2020.109013
DO - 10.1016/j.econlet.2020.109013
M3 - Article
AN - SCOPUS:85078961870
SN - 0165-1765
VL - 189
JO - Economics Letters
JF - Economics Letters
M1 - 109013
ER -