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INDEX NUMBER APPROACHES TO SEASONAL ADJUSTMENT

Published online by Cambridge University Press:  01 March 1999

W. Erwin Diewert
W. Erwin Diewert
Affiliation:
University of British Columbia
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Abstract

A seasonal commodity is one that either (1) is not available during certain seasons or (2) is always available but its prices or quantities fluctuate with the season or time of year. The existence of type-1 seasonal commodities in consumer preference functions means that the usual economic approach to index number theory cannot be applied to construct a short-term month-to-month or quarter-to-quarter consumer price index. We postulate various separability assumptions on intertemporal preferences that can be used to justify various seasonal index number formulas. One of our approaches leads to an index number solution to the problem of seasonal adjustment.

Keywords

Aggregation of CommoditiesConsumer TheoryIndex NumbersInflationSeasonal AdjustmentSeparabilityTime Series
Type
Research Article
Information
Macroeconomic Dynamics , Volume 3 , Issue 1 , March 1999 , pp. 48 - 68
Copyright
© 1999 Cambridge University Press

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