The Price Index Of The Basic Living Cost

This paper explore the way to establish the price index of basic living cost in Heilongjiang, taking the theory of living cost index and fixed basket index as the economic basis and the statistic basis.At first, this paper discuss academic basis. According to the theory of living cost index, in the condition of homothetic preference, Laspeyres and Paasche price index can be used to estimate the living cost index. And the economic implication of the necessity shows that the necessity meets the hypothesis of the homothetic preference, so we can use traditional fixed basket index theory to revise the theory of living cost index, which makes the economic and statistic basis together, and makes the academic basis for the research below.Then, do further research in the problem of the representative specification for the price index of the basic living index. On the selection of representative specification, this paper looks for the character of different goods and service through the choice of consumers, and does the analysis through the mathematical method according to the theory revealed preference, which breaks the tradition. On the basis of the investment catalogue for CPI, this paper deals with the data whose statistic calibrate is adjusted and get the initial target sample. And then redefine the necessity from demand, consumption structure and the price according to the economic signification of the necessity. On demand and consumption structure, we use cluster analysis to choose the goods and service which have the character of the necessity. Combining the result, fifteen goods and service are the same. To the same one, we do the correlation analysis of the price to choose the goods and service which are representative in the price. After three stages of screening, we choose fourteen commodities as the representative specification for the price index of basic living cost.After determination of representative specification, make the price survey on the basis of catalogue. Because of the principle of cost minimization, this paper suggest to use the net of price survey, but adjust the data to focus more on the time and place the consumers have low income usually go to, according to the character of necessity.Using the data gets from the price survey, we can estimate the price index of basic living cost in Heiongjiang. This paper emphasizes the method of the index establishment. On the collection of the form, this paper changes the traditional way to use the range between Laspeyres and Paasche price index to estimate the price index of basic living cost, which is one of the innovations in this paper. But actually, it's hard to get some data for comprehensive index. So this paper uses average index to calculate the index as the other form of comprehensive index. About the weight, this paper takes the consumption of the residents as the weight.The result of the empirical analysis using the data of Heilongjiang shows that the basic cost of living is higher than estimation by CPI. The establishment of the basic living index is good at improving the regulatory effect of the price on the distribution of the interest, and it's more in line with the economic reality, and can be promoted in different areas.