Owner-occupied housing costs and bias in the Irish Consumer Price Index

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Title: Owner-occupied housing costs and bias in the Irish Consumer Price Index
Authors: McCarthy, Colm
Permanent link: http://hdl.handle.net/10197/42
Date: Jun-2007
Abstract: The treatment of owner-occupied housing costs is a recurring problem in the construction of consumer price indices, and there are competing methodologies. In the most widely-used Irish index, the Payments Approach, which attaches a weight to a term involving historical house prices and an interest rate, is used to measure these costs. It is argued that this has resulted in a substantial over-statement of inflation in recent quarters, and that the over-statement will continue for some time. The Irish version of Eurostat’s Harmonised Index of Consumer Prices, recently running well below the CPI, is a more reliable guide. Few national statistical offices use the Payments Approach, and it is argued that the procedure used in Ireland should be reviewed.
Type of material: Working Paper
Publisher: University College Dublin; School of Economics
Keywords: Consumer Price Index;Cost of Living Index;Payments approach;Owner occupied housing
Subject LCSH: Cost and standard of living
Consumer price indexes
Price indexes
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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