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Office of Survey Methods Research
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Published Year: 2001
Survey/Program(s): Office of Prices and Living Conditions
Catalog: Economic Working Paper
WP Number: WP-335
Publication Status / Disposition: Available from the Office of Prices and Living Conditions (January 2001).
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Imputation and Price Indexes: Theory and Evidence from the International Price Program
Abstract
The goal of this paper is to theoretically and empirically demonstrate the consequences of different imputation methods using recent data from the International Price Program. We suppose that prices are missing due to random or erratic reporting. We consider three different imputation methods: carry-forward, which just assumes that the missing price is the same as in the previous period; cell-mean, which imputes the missing price using either the short-term or long-term index for related commodities; and linear interpolation, which uses the last and next observations for the item to linearly interpolate. Certain hybrid techniques, combining either carry-forward or cell-mean with linear interpolation, are also considered.