Definition: Economic approach

Category: Consumer Price Index

The economic approach to index number theory assumes that the quantities are functions of the prices, the observed data being generated as solutions to various economic optimization problems. In the CPI context, the economic approach usually requires the CPI to be some kind of cost of living index. http://www.ilo.org/public/english/bureau/stat/guides/cpi/index.htm
Source:
International Labour Organization (ILO), International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), Statistical Office of the European Communities (Eurostat), United Nations (UNECE), The World Bank, Consumer Price Index Manual: Theory and Practice, Geneva, August 2004
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