Definition: Axiomatic approach

Category: Consumer Price Index

The approach to index number theory that determines the choice of index number formula on the basis of its mathematical properties. A list of tests is drawn up, each test requiring an index to possess a certain property or satisfy a certain axiom. An index number may then be chosen on the basis of the number of tests satisfied. Not all tests may be considered to be equally important and the failure to satisfy one or two key tests may be considered sufficient grounds for rejecting an index. http://www.ilo.org/public/english/bureau/stat/guides/cpi/index.htm