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Transitivizing elementary price indices

21/06/2017 02:00
Method to adjust nontransitive elementary price indices, based on web data, in such a way that the resulting price indices are transitive, using the cycle method.
The present paper discusses a method to transitivize elementary price indices that have been calculated for internet data and that are not transitive. The paper is a continuation of Willenborg (2017a) that discusses a method to calculate the elementary price indices that are to be corrected with the cycle method, which is explained in the present paper. This method was proposed several years ago by the author. It can be shown to be a generalization of the well-known GEKS-method (see Willenborg, 2017b). Several scenarios are applied to update nontransitive price indices, some under the condition that previously computed values cannot be revised. These methods are illustrated by applying them to the same data, so that they can be directly compared with each other.