The 1995/1996 Household Income, Expenditure - (PDF, 101 mb ...

then when they disappear from the market, there is a break in continuity, as
shown by the drawing for melon prices below.
Theoretical Graph of the Price of Melons over Time
Price
oj
Melons
I I
I I
TO Tl Time
V.II
At time Tl, maybe a new season six months later, the overall prices are higher
as well. The percentage change of all other fruits should be applied to melon
prices from TO to Tl, and when melon becomes available again the series will
self-correct. The decision to impute hinges on the nature of the good being
truly seasonal or truly out of stock; if the item is merely sparsely available
throughout the year, or only temporarily out-of-stock, it should be priced as
other goods. CAP MAS price enumerators have no experience imputing values
based on price changes of similar items or in using imputed prices to fill in
missing cells for monthly group index calculations. Not imputing gives a
permanent downward bias. Dealing with seasonal items in the Egyptian CPI is
a matter of much importance and should be given special consideration in the
new index.
V.C.5 Estimator
Unless sampling and non-sampling errors cancel it out, the Laspeyres
Index formula has a natural upward bias. Moreover, a chained Laspeyres will
place an even larger upward bound on the cost of living, and time will
accentuate the drift. Finally, the Laspeyres estimator is sensitive to goods
with high price elasticities of demand (such as fruits and vegetables), or
goods that are frequently put on sale (such as clothing). Elasticities also rise
the more narrowly the good is defined. A weighted average of price relatives
in basic aggregation has been found to overstate price increases, and this
effect will be greater the higher the price volatility. (At the BLS, a weighted
ratio of average prices has been found less biased in the limit.)
An estimate of estimator bias was not possible because CAP MAS refused
to provide raw index price data for analysis. However, the prescription for
rationalizing the index estimator in the future is still valid and bears
mentioning. This would involve comparing the extent of estimator bias in the