Abstract:This empirical study investigates why the true costs of living for different income groups in Taiwan as measured by the superlative To¨rnqvist price index have grown dissimilarly over the sample period. Specifically, it shows that using the aggregate Cost of Living (COL) estimates for the entire households as is commonly practiced would produce noticeable group bias effect in measurement. Also the magnitude of the commodity substitution bias in the conventional Consumer Price Index (CPI) is found to be positiv… Show more
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