The Use of the Indices of Prices Received by Farmers in Estimating Consumer Price Indices

摘要

Increases in retail food prices have heightened public concern about causes of changes in food prices. The paper focuses on the use of farm level prices in the determination of retail prices. Two methods, an aggregate approach and a disaggregative approach, are used to estimate the Consumer Price Index for food at home. The aggregate approach involves construction of an index of prices received for farm commodities excluding nonfood items, which is then used with a distributed lag structure to estimate the Consumer Price Index for food at home. The disaggregated approach involves use of a distributed lag structure for food item categories in the index of prices received by farmers to estimate the Consumer Price Index for the corresponding food item. Comparison of the two methods indicates that neither approach is clearly superior for forecasting changes in food prices.