Division of Price and Index Number Research
The Division was created in 1963 in response to the Stigler Commission Report on Federal price statistics. It has had a long and successful professional history, both in providing economic consulting services to the Bureau and in serving as a source of, and conduit for, new ideas in the economics profession.
A large portion of Division staff time is devoted to individual, long term research on both theoretical and empirical topics. Traditionally, Division research has been oriented toward resolution of measurement problems, using a wide range of methods from microeconomic and macroeconomic theory, consumer economics, industrial organization, labor economics, mathematical economics, econometrics, and statistics.
The Division also provides consulting services to the other price program Divisions as the need arises. For example, staff members have worked with analysts from the Consumer Price Program to develop and analyze the new C-CPI-U (superlative price index). Currently consulting efforts also include projects involving the Producer Price Index Program and the Consumer Expenditure Surveys.
Current research includes:
- Developing methods to quality adjust medical prices
- Evaluating the use of medical claims data as an alternative source of medical prices
- Evaluating the measurement of health insurance prices
- Redesigning indexes to utilize newly available corporate transaction data aggregators (e.g., JD Power Vehicles Data)
- Development of automatizing data collection methods for price index programs
- Developing quality adjustment methods with machine learning algorithms
- Measuring the impact of formula assumptions for the CPI
- Evaluating models of nonhomothetic demand underlying heterogeneous exact price index formulas
- Developing new methods for computing a cost-of-living index
- Developing housing price indexes accounting for neighborhood quality
- Analyzing pricing zones and spatial price discrimination
- Evaluating methods to incorporate surplus gains from variety into price index formulas
- Evaluating methods of estimating the elasticity of demand between goods
- Evaluating methods of measuring the consumer benefit of new goods
- Constructing an improved historical CPI
- Accounting for in-kind benefits in expenditure-based poverty thresholds
- Developing method for distributing total factor productivity among production factors
- Investigating estimation problems that can be solved using estimated multivariate time-series models