Index-number tests and the common-scaling social cost-of-living index

@article{Donaldson2012IndexnumberTA,
  title={Index-number tests and the common-scaling social cost-of-living index},
  author={David J. Donaldson and Krishna Pendakur},
  journal={Social Choice and Welfare},
  year={2012},
  volume={38},
  pages={407-429}
}
For a change in prices, the common-scaling social cost-of-living index is the equal scaling of each individual’s expenditure level needed to restore the level of social welfare to its pre-change value. This index does not, in general, satisfy two standard index-number tests. The reversal test requires the index value for the reverse change to be the reciprocal of the original index. And the circular test requires the product of index values for successive price changes to be equal to the index… CONTINUE READING

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