Decomposing the changes of the Divisia price index: Application to inflation in the Philippines

• Main Author: FUJII, Tomoki
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Divisia price index; preference change; decomposition; Philippines; Asian Studies; Macroeconomics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1518; https://ink.library.smu.edu.sg/context/soe_research/article/2517/viewcontent/EB_13_V33_I1_P51.pdf
• Institution: Singapore Management University

We decompose the logarithmic change in the Divisia price index into the pure price, substitution, and preference effects, although the latter two effects are hard to distinguish in practice. This decomposition allows us to identify the incidence and contributing factors of inflation. In the Philippi...