Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data

Sharp changes in consumer expenditure may bias inflation during the COVID-19 pandemic. Using public data from debit card transactions, I quantify these changes in consumer spending, update CPI basket weights and construct an alternative price index to measure the effect of the COVID-induced weightin...

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Autor principal: Seiler, Pascal
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer International Publishing 2020
Materias:
Original Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7493696/
https://www.ncbi.nlm.nih.gov/pubmed/32959014
http://dx.doi.org/10.1186/s41937-020-00057-7
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author Seiler, Pascal
author_facet Seiler, Pascal
author_sort Seiler, Pascal
collection PubMed
description Sharp changes in consumer expenditure may bias inflation during the COVID-19 pandemic. Using public data from debit card transactions, I quantify these changes in consumer spending, update CPI basket weights and construct an alternative price index to measure the effect of the COVID-induced weighting bias on the Swiss consumer price index. I find that inflation was higher during the lock-down than suggested by CPI inflation. The annual inflation rate of the COVID price index was −0.4% by April 2020, compared to −1.1% of the equivalent CPI. Persistent “low-touch” consumer behavior can further lead to inflation being underestimated by more than a quarter of a percentage point until the end of 2020.
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spelling pubmed-74936962020-09-17 Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data Seiler, Pascal Swiss J Econ Stat Original Article Sharp changes in consumer expenditure may bias inflation during the COVID-19 pandemic. Using public data from debit card transactions, I quantify these changes in consumer spending, update CPI basket weights and construct an alternative price index to measure the effect of the COVID-induced weighting bias on the Swiss consumer price index. I find that inflation was higher during the lock-down than suggested by CPI inflation. The annual inflation rate of the COVID price index was −0.4% by April 2020, compared to −1.1% of the equivalent CPI. Persistent “low-touch” consumer behavior can further lead to inflation being underestimated by more than a quarter of a percentage point until the end of 2020. Springer International Publishing 2020-09-16 2020 /pmc/articles/PMC7493696/ /pubmed/32959014 http://dx.doi.org/10.1186/s41937-020-00057-7 Text en © The Author(s) 2020 Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
spellingShingle Original Article
Seiler, Pascal
Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data
title Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data
title_full Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data
title_fullStr Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data
title_full_unstemmed Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data
title_short Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data
title_sort weighting bias and inflation in the time of covid-19: evidence from swiss transaction data
topic Original Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7493696/
https://www.ncbi.nlm.nih.gov/pubmed/32959014
http://dx.doi.org/10.1186/s41937-020-00057-7
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