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Home Research areas Consumer behaviour and indirect taxation Price indices and inflation

Price indices and inflation

Price indices are used to assess how living standards have changed over time, to uprate state benefits and tax thresholds in line with increases in the cost of living, and to measure increases in house prices across regions of the UK.

Our research in this area looks at the advantages and limitations of different approaches to measuring price changes in various contexts. We also look at how households’ individual inflation experiences vary over time and across different demographic and income groups.

Selected highlights

Journal article | Journal of the Royal Statistical Society: Series A
is_the_carli_index_flawed_assessing_the_case_for_the_new_retail_price_index_rpij
Peter Levell discusses the recent decision of the UK's Office for National Statistics to replace the controversial Carli index with the Jevons index in a new version of the retail price index—RPIJ.
Journal article | Journal of Business & Economic Statistics
Individual cost of living indices will vary across individuals, and thus any social cost-of-living index faces an aggregation problem. This article proposes a solution to this problem.
Journal article | Economic Journal
This paper uses revealed preference restrictions and nonparametric statistical methods to bound the true cost-of-living index which corresponds most closely to the UK Retail Prices Index (RPI)
External publication
uk_consumer_price_statistics_a_review
The UK Statistics Authority published the independent review of UK consumer prices statistics led by Paul Johnson, Director of the Institute for Fiscal Studies, on 8 January 2015. The full report and an executive summary are available via the links on the right-hand side of this page. Further ...
External publication
measuring_poverty_when_inflation_varies_across_households
This research looks at trends in poverty (relative and absolute) after taking into account households’ different experiences of inflation.
Briefing note
measuring_house_prices_a_comparison_of_different_indices
While house prices are on a general upward trend, exactly how fast house prices are increasing and whether they have attained their previous peak are less clear. This briefing note is designed to shed some light on these issues.

Contacts

Contact IFS on 020 7291 4800 or mailbox@ifs.org.uk

Peter Levell
Senior Research Economist