A1044
Title: A Measurement index: Proper or Not?
Authors: Hideyuki Mizobuchi - Doshisha University (Japan) [presenting]
Valentin Zelenyuk - University of Queensland (Australia)
Abstract: Since the seminal works of Irving Fisher, it has been known that circularity (or transitivity) is an overly demanding property for index numbers such as price and quantity indexes. Recently, the attention to this property has re-emerged in the context of productivity analysis and the index that satisfies it was even dubbed as "``roper index''. We discuss some critical caveats of such indexes, recalling the classic (yet seems to be forgotten) theoretical results and illustrating them with several examples that show that such indexes could lead to serious measurement bias and substantially misrepresent a phenomenon.
