Bortkiewicz on Chain Indices and Irving Fisher's Reversal Tests, A Historical Note and a Disapproval of the Time Reversal Test

von der Lippe, Peter (2015): Bortkiewicz on Chain Indices and Irving Fisher's Reversal Tests, A Historical Note and a Disapproval of the Time Reversal Test.

Abstract

Ladislaus von Bortkiewicz has criticized chain indices and Irving Fisher's time and factor reversal tests. However, his arguments (published in German articles) though well ahead of his time and still relevant today are widely fallen in oblivion. He was not the only German statistician who criticized Fisher' approach but the first who extensively and successfully used mathematics to substantiate it and to derive a formula for the "chain drift". We present his ideas together with some own arguments against the time reversal test. To study Bortkiewicz's and other criticisms of Fisher's reversal tests and chain indices remains worthwhile, because reference to the time reversal test is still unshakably popular today and it only recently became mandatory to compile chain indices in official statistics.

• Item Type: MPRA Paper
• Language: English
• Keywords: Index Numbers, Time Reversal Test, Factor Reversal Test, Fisheer's ideal index, chain indices, transititvity
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data ; Data Access; E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth ; Environmental Accounts; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation

References

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von der Lippe, Peter (2007), Index Theory and Price Statistics, Frankfurt

von der Lippe, Peter (2013), Recurrent Price Index Problems and Some Early German Papers on Index Numbers. Notes on Laspeyres, Paasche, Drobisch, and Lehr, Jahrbücher für Nationalökonomie und Statistik Vol. 233/3, pp- 336 – 366