Further Index-Number Problems
Like any other statistics, the accuracy of an index number should be given in terms of its variance… So far nobody seems to have attempted to produce any theory for index numbers in such terms, and it seems doubtful whether any such theory could be of any practical use… The concept of an accurate index should be given up. Statisticians should not be forced to behave as if it were possible to make the index very accurate, if only much money is spent on its construction. If government policy requires great confidence in the index, the statisticians should not permit themselves to be used as hostage. Hofsten (1956), pp. 8, 14
KeywordsPrice Index Price Relative Quality Change Index Number Indifference Curve
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