Estimation Accuracy of CPI: High Income Households' Expenditure Patterns Approach
Nataliia M. Romanchuk
Institute for Demography and Social Studies National Academy of Sciences of Ukraine

Consumption Price Index (CPI) belongs to the indexes reflected the level of economy development, efficiency of government financial management, social stability. Its compiled for adjusting the loss of consumer purchasing ability from time to time caused by inflation so CPI estimation accuracy is significant. The results of Boskin committee's research verify this statement.

The problem of CPI accuracy stands in some points: index concept selection, sample, price collection expenditure weights, etc. The last one was chosen as a discussing question for our paper.

As the main souse of weights calculation in Ukraine is Households' Income and Expenditure Survey there is a problem of underestimate of top-income households caused by the high level rich households refusing be a respondent. However, previous researches showed considerable difference in consumption patterns of different decile groups' members. And the fact of underestimation of the top of them leads to the weights imprecision and so – to the CPI inaccuracy.

To our mind the methods of indirect estimations could be used for the solution of the problem of rich households' expenditure patterns underestimation.


Boskin, Michael J. Toward a More Accurate Measure of the Cost of Living. - Final Report to the Senate Finance Committee from the Advisory Commission To Study The Consumer Price Index. - December 4, 1996.

Keywords: high income households; expenditure weights; CPI; indirect estimation methods

Biography: Junior Research Officer of Institute for Demography and Social Studies, National Academy of Sciences of Ukraine Department of Social and Demographic Statistics.