The Plutocratic Bias in the CPI : Evidence from Spain

Author/Editor:

Javier Ruiz Castillo ; Eduardo Ley ; Mario Izquierdo

Publication Date:

October 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

We define the plutocratic bias as the difference between inflation measured according to the current official CPI and a democratic index in which all households receive the same weight. We estimate that during the 1990s the plutocratic bias in Spain amounts to 0.055 percent per year. However, positive and negative biases cancel off when averaging over the whole period. The mean absolute bias is significantly larger, 0.090. We can explain most of the oscillations experimented by the plutocratic bias by the price behavior of three goods: a luxury good and two necessities.

Series:

Working Paper No. 00/167

Subject:

English

Publication Date:

October 1, 2000

ISBN/ISSN:

9781451858174/1018-5941

Stock No:

WPIEA1672000

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

25

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