Naohito Abe Toshiki Enda Noriko Inakura and Akiyuki Tonogi Comments by Paul Schreyer OECD Deputy Director Statistics RIETI Workshop Tokyo October 2016 The paper 2 ID: 778278
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Slide1
Effects of New Goods and Product Turnover on Price Indexes
Naohito Abe, Toshiki Enda, Noriko Inakura, and Akiyuki Tonogi
Comments by Paul Schreyer
OECD Deputy Director Statistics
RIETI Workshop Tokyo
October
2016
Slide2The
paper2
Slide3Authors observe: 35% of the value of sales is
for new productsHow does entry and exit of varieties and new products affect price indices?Or rather:
given
that
price measurement mainly relies on comparing prices of existing products, what is the bias caused by ignoring entry?And if entry is recognised how should this happen?Study focuses on price differentials between old and new productsMonthly scanner data for food and daily products
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Slide4New good if the product exists in period 𝑡 but not in period 𝑡
– 𝑦Old good if the product does not exist in period 𝑡 but exists in period 𝑡 – 𝑦Continuing good if it exists in both periodsDecomposition of unit value index:Laspeyres index of continued products
Substitution effect among continued products
Price effect of product turnover
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Slide53
comments5
Slide6Very clear paper
Carefully derived relations and estimatesNothing to add on this front!Comment 1
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Slide7UVI is decomposed
into:Laspeyres price indexsubstitution effectsturnover–new goods effectsLaspeyres price index corresponds roughly
to official
methodology
What
is the recommendation for CPI compilers? Move to UVI to capture substitution and turnover effects? Comment 27
Slide8Products in study = food, daily necessities and cosmeticsTheory used for price measurement very well adopted to this type of products –
many varieties, small modifications‘Big ticket items’ of new products or important quality change likely elsewhere: ICT, health, consumer durables,…Can the approach be used there as well?Comment 3
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Slide9I enjoyed reading this paper!
Paul.Schreyer@OECD.org
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