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Project Information

Project Information


Improving Cost-of-Living Indexes and Consumer Inflation Statistics in the Digital Age


Project Scope:

An ad hoc panel of the National Academies of Sciences, Engineering, and Medicine will review measurement issues in the Bureau of Labor Statistics (BLS) Consumer Price Index program, and provide guidance for its continued modernization. The study will examine the potential to improve CPI methodology by incrementally transitioning from traditional survey-based data collection to an approach that blends multiple (survey and non-survey, government and commercial) data sources. The panel will consider opportunities to apply new data sources to improve the construction of specific elementary item-area indexes as well as to improve index aggregation along several dimensions.

Many data sources have emerged during the past 20 years (since the last National Academies' review of the CPI), that could be used in the construction of the 7,000+ elementary item-area indexes in a way that improves the accuracy, timeliness, and detail of resulting price statistics, or reduces costs in the CPI program. The panel will identify specific areas where new kinds of data may be harnessed in a relatively straightforward way to improve price measurement of some items such as food and electronics. The panel will also propose solutions for some historically difficult-to-measure expenditure categories, particularly for which the availability of alternative data create opportunities for improved price measurement.

The panel will consider opportunities to use new data sources to improve aggregation of the elementary item-area indexes and also to mitigate upper-level substitution bias in the CPI-U and the CPI-W—for example, by taking advantage of the simultaneous availability of quantity and price information to update baskets and weights with shorter lags. As part of this task, the panel may revisit concerns about data sources used to estimate population item expenditure weights. The panel will also assess the prospects for creating new index aggregates that would present information about prices paid and expenditure weights for goods and services by households across the income distribution (by decile, or perhaps by quintile).

Finally, the panel will offer forward-looking thoughts about what price measurement may look like in 20 years and what BLS can do to anticipate future research and policy needs. As part of its information-gathering activities, the panel will gather input from data users, stakeholders, and survey experts. The panel will produce a consensus report with conclusions and recommendations.


Status: Current

PIN: DBASSE-CNSTAT-19-05

Project Duration (months): 20 month(s)

RSO: Mackie, Chris

Board(s)/Committee(s):

Committee on National Statistics

Topic(s):

Surveys and Statistics



Geographic Focus:

Committee Membership

Committee Post Date: 03/13/2020

Daniel E. Sichel - (Chair)
Is professor of economics at Wellesley College. He also serves as a research associate at the National Bureau of Economic Research, advisory committee member at the Bureau of Economic Analysis, and as executive committee member for the Conference on Research in Income and Wealth. Dr. Sichel is a member of the American Economic Association and an international advisory board member for the International Productivity Monitor. He has been awarded several honors including the Indigo Prize in 2017 and the Kendrick Prize in 2010. His research interests and publications are in macroeconomics, economic growth, technology, and economic measurement. Dr. Sichel has a B.A. degree in economics and an M.A. degree in public policy, both from the University of Michigan, and a Ph.D. in economics from Princeton University.
Ana M. Aizcorbe
Is a research economist at the Bureau of Economic Analysis (BEA), where she conducts research into price index and other measurement issues. Prior to this, she served as BEA’s chief economist where she initiated a Health Satellite Account that allows one to identify the drivers underlying the cost of treating diseases. Dr. Aizcorbe also held positions as an ASA/NSF/BLS research fellow, staff economist at the Federal Reserve Board, visiting fellow at The Brookings Institution, and a research economist in the Bureau of Labor Statistics. She has published a book titled “A Practical Guide to Price Index and Hedonic Techniques” and numerous articles on the theoretical issues underlying price measurement, with empirical applications to the high-technology and service sectors. Dr. Aizcorbe has a B.A. degree in economics from Georgetown University, and a Ph.D. in economics from Boston College.
Alberto F. Cavallo
Is the Edgerley family associate professor at Harvard Business School, where he teaches in the Business, Government, and the International Economy (BGIE) unit. He also serves as faculty research fellow at the National Bureau of Economic Research, and as a member of the Technical Advisory Committee of the U.S. Bureau of Labor Statistics. Dr. Cavallo’s research focuses on the behavior of prices and its implications for macroeconomic measurement and policies—his work is based on the use of daily data collected from hundreds of online retailers around the world. He co-founded The Billion Prices Project, an academic initiative that pioneered the use of online data to conduct research on high-frequency price dynamics and inflation measurement and also created Inflacion Verdadera to measure the real inflation rate in Argentina and Venezuela. Dr. Cavallo has a B.S. degree from the Universidad de San Andres in Argentina, an MBA from MIT Sloan, and a Ph.D. from Harvard University
Jan De Haan
Is a senior researcher at Statistics Netherlands, the Dutch national statistical institute. Until January 2019, Dr. De Haan was also a professor at the Delft University of Technology. He is a member of the steering committee of the international working group on price indices (Ottawa Group) and an elected member of the U.S. conference on research in income and wealth. In the past, he has served as an advisor to many statistical institutes, including Statistics Canada, the Australian Bureau of Statistics and Statistics New Zealand, and is an affiliate of the University of New South Wales’ Real Estate Initiative. His main research interest is economic measurement, with a focus on index numbers and applications to scanner data and web-scraped data, real estate, hedonic regression methods, and price and volume measurement of public services. Dr. De Haan has published extensively in peer-reviewed journals, including Journal of Econometrics, Journal of Business & Economic Statistics, Econometric Reviews, and the Review of Income and Wealth. He has an M.A. degree in economics from the University of Amsterdam, and a Ph.D. in economic measurement from Erasmus University Rotterdam.
W. E. Diewert
Is professor of economics at the University of British Columbia and the University of New South Wales. Dr. Diewert has published over 120 papers in journals and 140 chapters in books. His main areas of research include duality theory, flexible functional forms, index number theory (including the concept of a superlative index number formula), the measurement of productivity, the measurement of property prices, the pure theory of international trade, and the calculation of excess burdens of taxation. He was awarded the Julius Shiskin Memorial Award for Economic Statistics in 2005. He is a founding member of two international groups that study measurement issues: the Ottawa Group on Prices and the Canberra Group on Capital Measurement. Dr. Diewert currently serves as chair of the Statistics Canada advisory committee on prices. He has B.A. and M.A. degrees in mathematics from the University of British Columbia, and a Ph.D. in economics from the University of California at Berkeley.
Lisa M. Lynch
Is provost and Maurice B. Hexter professor of social and economic policy at Brandeis University. She is also a member of the Federal Reserve Bank of New York’s Economic Advisory Panel and a research associate at the National Bureau of Economic Research and at IZA Germany. Dr. Lynch has researched the impact of technological change and organizational innovation on productivity and wages, the determinants of youth unemployment, and the school-to-work transition, and has published extensively on the impact of technological change and organizational innovation on productivity and wages, the determinants of youth unemployment, and the school-to-work transition. Dr. Lynch has an A.B. from Wellesley College, and an M.Sc. and Ph.D. in economics from the London School of Economics and Political Science.
Raven S. Molloy
Is assistant director of the Division of Research and Statistics at the Federal Reserve Board of Governors, where she oversees work related to residential and commercial mortgage credit conditions, real estate prices, and housing markets. Her primary fields of research are housing, and urban and labor economics, and she has written on topics including housing supply regulation, housing affordability and valuation, mortgage credit availability, migration, foreclosure, vacancy, and executive compensation. Dr. Molloy serves on the editorial boards of the Journal of Housing Economics, Journal of Urban Economics, and Regional Science and Urban Economics. She is a committee member of the women in real estate network of the American Real Estate and Urban Economics Association, and a fellow of the Weimer School of Advanced Studies in Real Estate and Land Economics of the Homer Hoyt Institute. She has a B.A. degree in economics and Asian studies from the University of Virginia, and a Ph.D. in economics from Harvard University.
Brent R. Moulton
Is senior economist in the Statistics Department of the International Monetary Fund. He has spent 32 years working in federal economic statistics, serving as associate director for national economic accounts at the Bureau of Economic Analysis and as chief of price and index number research at the Bureau of Labor Statistics. Dr. Moulton received the Julius Shiskin Award for leadership in implementing major innovations into the U.S. national accounts. Previously, he served as a member of the international advisory expert group on national accounts, which worked on the development of the updated international standards in System of National Accounts 2008. He is the author of numerous articles on economic measurement including essential research on lower-level substitution bias in the consumer price index that led to the adoption by BLS of the geometric mean formula. Dr. Moulton has a B.A. degree in economics from Brigham Young University, and a Ph.D. in economics from the University of Chicago.
Marshall B. Reinsdorf
Is senior economist at the International Monetary Fund, working in areas of statistical methodology, and president of the International Association for Research in Income and Wealth. Dr. Reinsdorf was previously chief of the national accounts research group at the U.S. Bureau of Economic Analysis, a financial economist at the FDIC, and a research economist at the U.S. Bureau of Labor Statistics. He is an expert in macroeconomic statistics, including national accounts, prices, and productivity. He is an author of more than 40 articles on economics and statistics and an editor of two books on economic measurement. Dr. Reinsdorf has a Ph.D. in economics from the University of Maryland, College Park.
Laura Rosner-Warburton
Is senior economist and founding partner at MacroPolicy Perspectives, LLC, specializing in the areas of monetary policy and inflation. Ms. Rosner-Warburton began her career in the financial services industry, working as an economist for Barclays Capital, and in a policy analysis group in the Markets Division of the Federal Reserve Bank of New York. Her work on inflation spans a range of economic and market environments and benefits from a blend of macro and micro perspectives. In the past, she has contributed to the development and design of the New York Fed’s Survey of Primary Dealers. She has a B.A. degree in economics from Columbia University.
Louise M. Sheiner
Is Robert S. Kerr senior fellow and policy director at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution in Washington, DC. Prior to this, she was senior economist at the board of governors of the Federal Reserve System. Dr. Sheiner’s expertise covers a range of disciplines, including public finance, health economics, fiscal policy, public economics, and welfare. She has written widely on subjects such as health care spending, macroeconomic implications of aging, household spending, and Medicare. Her recent publications include Should America Save for Its Old Age? Fiscal Policy, Population Aging, and National Saving; Generational Aspects of Medicare; and Demographics and Medical Care Spending: Standard and Non-Standard Effects. She has an A.B. in biology, an M.A. degree in economics, and a Ph.D. in economics, all from Harvard University.
Christopher D. Mackie - (Staff Officer)

Committee Membership Roster Comments

Dr. Alberto Cavallo resigned from the panel on 7-2-2020

Events


Event Type :  
Meeting

Description :   

The focus of this session is on improving elementary indexes (greater timeliness, frequency, and detail of price and quantity information) but the study is also covering other stages of CPI methodology, such as construction and updating of upper-level category weights.


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
No

Publication(s) resulting from the event:

-

Event Type :  
Meeting

Description :   

Discussion of the use of high-frequency and alternative data sources in price measurement. This meeting will focus on the use of alternative data by statistical agencies and innovative price statistics work being done beyond statistical agencies.


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
No

Publication(s) resulting from the event:

-

Event Type :  
Meeting

Description :   

A discussion of subgroup (defined by income) price indexes. The panel hopes to learn about ongoing research to construct subgroup price indexes and about the data demands for such work.


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
No

Publication(s) resulting from the event:

-

Event Type :  
-

Description :   

Closed in its entirety


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
Yes

Closed Session Summary Posted After the Event

The following committee members were present at the closed sessions of the event:

Dan Sichel
Ana Aizcorbe
Jan de Haan
Lisa Lynch
Brent Moulton
Marshall Reinsdorf
Laura Rosner-Warburton
Louise Sheiner

The following topics were discussed in the closed sessions:

Report outline
Subgroup chapters and writing assignments

The following materials (written documents) were made available to the committee in the closed sessions:

None

Date of posting of Closed Session Summary:
July 28, 2020
Publication(s) resulting from the event:

-

Event Type :  
-

Description :   

This event is totally closed


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
Yes

Closed Session Summary Posted After the Event

The following committee members were present at the closed sessions of the event:

Dan Sichel (chair)
Ana Aizcorbe
Alberto Cavallo
Jan de Haan
Erwin Diewert
Lisa Lynch
Raven Molloy
Brent Moulton
Marshall Reinsdorf
Laura Rosner-Warburton
Louise Sheiner

The following topics were discussed in the closed sessions:

Balance, bias, and conflict of interest discussion
Work on report outline; create subgroups
Next steps

The following materials (written documents) were made available to the committee in the closed sessions:

None

Date of posting of Closed Session Summary:
June 19, 2020
Publication(s) resulting from the event:

-

Event Type :  
Meeting

Description :   

BLS leadership will articulate their goals for the study and their motivation for commissioning it. Presentations by BLS experts will outline current CPI program activities and plans to reengineer price and expenditure input data used in the estimation of cost-of-living measures and consumer price indexes. Panel members and sponsor representatives will then revisit the project statement of task and revise as necessary. At the end of the meeting, the group will discuss the structure and content of an eventual workshop (public meeting) which will be the panel’s main vehicle for gathering information from experts beyond the panel and BLS on various topics.


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
No

Publication(s) resulting from the event:

-

Event Type :  
Meeting

Description :   

This first meeting of the panel will discuss the project Statement of Work and the structure of a possible summer 2020 workshop. It will be held entirely online.


Registration for Online Attendance :   
NA

Registration for in Person Attendance :   
NA


If you would like to attend the sessions of this event that are open to the public or need more information please contact

Contact Name:  Anthony Mann
Contact Email:  amann@nas.edu
Contact Phone:  (202) 334-3266

Supporting File(s)
-
Is it a Closed Session Event?
Yes

Closed Session Summary Posted After the Event

The following committee members were present at the closed sessions of the event:

Dan Sichel (chair)
Ana Aizcorbe
Alberto Cavallo
Jan de Haan
Erwin Diewert
Lisa Lynch
Raven Saks Molloy
Brent Moulton
Marshall Reinsdorf
Laura Rosner-Warburton
Louise Sheiner

The following topics were discussed in the closed sessions:

Revising the statement of task
Summer-Fall 2020 workshop
Planning for future virtual calls and panel meetings

The following materials (written documents) were made available to the committee in the closed sessions:

None

Date of posting of Closed Session Summary:
May 05, 2020
Publication(s) resulting from the event:

-

Publications

  • Publications having no URL can be seen at the Public Access Records Office
Publications

No data present.