User:Bkwillwm/Chain drift
Chain drift occurs in non transitive price indexes that are based on price and weight comparisons chained over time rather than direct indexes, a series of comparisons back to a single period. Under chain drift, all prices could return to their base period levels, but the index would not be equal to 1, so a change in prices would be implied when no change had occurred.[1]
When indexes are transitive, there is no chain drift and a chained index will equal its corresponding direct index.[1] When indexes are non-transitive, the choice of base period alters the resulting index.[2]
References[edit]
- ^ a b de Haan & Krsinich 2012, p. 5.
- ^ de Haan & Krsinich 2012, p. 4.