The Plutocratic Bias in the Cpi Evidence from Spain

26 Pages Posted: 2 Feb 2006

See all articles by Javier Ruiz-Castillo

Javier Ruiz-Castillo

Charles III University of Madrid - Department of Economics; Universidad de Alicante

Eduardo Ley

World Bank

Mario Izquierdo

Banco de España

Date Written: October 2000

Abstract

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.

Keywords: Consumer price index cost-of-living index aggregation

JEL Classification: C43 D31 D63

Suggested Citation

Ruiz-Castillo Ucelay, Javier and Ley, Eduardo and Izquierdo, Mario, The Plutocratic Bias in the Cpi Evidence from Spain (October 2000). IMF Working Paper No. 00/167, Available at SSRN: https://ssrn.com/abstract=880197

Javier Ruiz-Castillo Ucelay (Contact Author)

Charles III University of Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+ 34 916 249 588 (Phone)
+ 34 916 249 329 (Fax)

Universidad de Alicante

Campus de San Vicente
Carretera San Vicente del Raspeig
San Vicente del Raspeig, Alicante 03690
Spain

Eduardo Ley

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

HOME PAGE: http://eWorldNet.org

Mario Izquierdo

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
92
Abstract Views
1,615
Rank
506,051
PlumX Metrics