The consumer price indexes for the entire country and those for individual households are weighted arithmetic averages of relative prices, and they differ essentially in terms of their weighting systems. Whereas the former use the proportions of total expenditure on goods and services, the latter use the proportions of expenditure by each household. In the usual calculation of the index for the entire country, each household contributes to determining the national index with a weight proportional to its expenditure. In other words, the households that spend more - that is, the wealthier ones - are represented in calculation of the national index to a greater extent, and this explains why the latter is termed the 'plutocratic index'. In contraposition to plutocratic indexes are the 'democratic ' ones in which the same weight is assigned to each household. The paper presents a first estimation of the democratic price indexes far Italy in the period 1995-2002 and far Marche Region in the period 1995-2005. The two methods for calculating the national index, which are based, as we have pointed out, on different weighting systems, lead essentially to same results independently both of the territorial delimitation and of the level of aggregation that we consider. JEL Classification: C43, E31, E64 Keywords: consumer price indexes, plutocratic and democratic indexes, inflation, price policy

Indicatori democratici e plutocratici: la scelta è così rilevante? Uno studio sulla realtà italiana e marchigiana / Mattioli, Elvio; Chelli, Francesco Maria. - In: ECONOMIA MARCHE. - ISSN 1120-9593. - 1:(2008), pp. 107-122.

Indicatori democratici e plutocratici: la scelta è così rilevante? Uno studio sulla realtà italiana e marchigiana.

MATTIOLI, ELVIO;CHELLI, Francesco Maria
2008-01-01

Abstract

The consumer price indexes for the entire country and those for individual households are weighted arithmetic averages of relative prices, and they differ essentially in terms of their weighting systems. Whereas the former use the proportions of total expenditure on goods and services, the latter use the proportions of expenditure by each household. In the usual calculation of the index for the entire country, each household contributes to determining the national index with a weight proportional to its expenditure. In other words, the households that spend more - that is, the wealthier ones - are represented in calculation of the national index to a greater extent, and this explains why the latter is termed the 'plutocratic index'. In contraposition to plutocratic indexes are the 'democratic ' ones in which the same weight is assigned to each household. The paper presents a first estimation of the democratic price indexes far Italy in the period 1995-2002 and far Marche Region in the period 1995-2005. The two methods for calculating the national index, which are based, as we have pointed out, on different weighting systems, lead essentially to same results independently both of the territorial delimitation and of the level of aggregation that we consider. JEL Classification: C43, E31, E64 Keywords: consumer price indexes, plutocratic and democratic indexes, inflation, price policy
2008
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11566/50209
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