NONPARAMETRIC COST-OF-LIVING INDEXES RATIONALIZED BY THE GENERALIZED FECHNER-THURSTONE DIRECT UTILITY FUNCTION AND CHANGES IN LABOR AND DEMOGRAPHIC PATTERNS

摘要

This dissertation describes several recently developed nonparametric (statistical) cost-of-living indexes. These nonparametric cost-of-living indexes are computed directly from base period and current period prices and expenditures, individual or aggregate, and do not depend on hypothetical specifications of form or on statistical estimates of parameters of utility functions. Apart from the formulas to be presented, the only empirical or theoretical knowledge an individual or an aggregate of two or more consumers requires to compute its own nonparametric cost-of-living indexes is its record of relevant prices and its expenditures. These nonparametric cost-of-living indexes hold out a very promising prospect for routine, inexpensive, practical use in policy applications such as the negotiation of cost-of-living adjustments (COLAs) in wage contracts and social security benefits, and in policy-related empirical and theoretical research. This paper evaluates the impact of the growth of the multiple wage earner families, population shifts, changes in non-wage earning hours and income distribution, all of which have been expensive and difficult problems to evaluate in currently used cost-of-living indexes, on the nonparametric cost-of-living indexes.