PriceIndices – a New R Package for Bilateral and Multilateral Price Index Calculations

• Main Author: Jacek Białek
• Format: Article
• Language: English
• Published: Czech Statistical Office 2021-06-01
• Series: Statistika: Statistics and Economy Journal
• Subjects: scanner data; bilateral indices; multilateral indices; elementary indices; chain indices; superlative indices
• Online Access: https://www.czso.cz/documents/10180/143550797/32019721q2_bialek.pdf/3cd5bf11-22f4-4ee5-b294-1d7d5909e4b4?version=1.1
• ISSN: 0322-788X; 1804-8765

The methodology of price indices dedicated to scanner data is broad, multifaceted, and still contains many open problems. The main challenges include choosing the index formula and the time window width in multilateral methods, as well as determining splicing or other data updating methods. Many NSIs experiment with scanner data, their processing, classifying, matching, and finally using this type of data for CPI calculations. However, these activities are limited, which is partly due to the lack of widely available software in this field. On the one hand, R packages dedicated to price indices are available (e.g. IndexNumR or micEconIndex), on the other hand, their functionality and the scope of implemented methods are quite limited. The article discusses a new R package, i.e. PriceIndices, which is used to process scanner data and to calculate bilateral and multilateral price indices. The assumptions for the construction of the package were such that it would serve both practitioners and scientists through a multitude of methods and their parameterization. The main purpose of the article is to present the utility of the package in the field of analyzing the dynamics of scanner prices. All obtained results are based on the real scanner data set on milk obtained from one retailer chain in Poland and included in the PriceIndices package.