Measuring Real Consumption and CPI Bias Under Lockdown Conditions

84 Pages Posted: 18 May 2020 Last revised: 3 Mar 2021

See all articles by Erwin Diewert

Erwin Diewert

University of British Columbia (UBC)

Kevin J. Fox

UNSW Australia Business School, School of Economics

Date Written: May 2020

Abstract

Millions of goods and services are now unavailable in many countries due to the current coronavirus pandemic, dramatically impacting on the construction of key economic statistics used for informing policy. This situation is unprecedented; hence methods to address it have not previously been developed. Current advice to national statistical offices from the IMF, Eurostat and the UN is shown to result in downward bias in the CPI and upward bias in real consumption. We conclude that the only way to produce a meaningful CPI within the lockdown period is through establishing a continuous consumer expenditure survey.

Suggested Citation

Diewert, Erwin and Fox, Kevin J., Measuring Real Consumption and CPI Bias Under Lockdown Conditions (May 2020). NBER Working Paper No. w27144, Available at SSRN: https://ssrn.com/abstract=3603774

Erwin Diewert (Contact Author)

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

Kevin J. Fox

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia
(02)9385-3320 (Phone)
(02)9313-6337 (Fax)

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