Influencing Factors Analysis Of CPI Based On Functional Data Analysis

CPI is an important indicator for measuring inflation. In recent years, therelationship between CPI and its influencing factors has drawn extensive interests inresearch field. However, the existed researches have mainly three defects. The firstone is the problem of dealing with different statistics interval between CPI and itsinfluencing factors. The second one is the problem of dealing with indicators withunequal statistics interval or large number of missing data. The last one is thatresearch for influencing factors continuous change over time with CPI is lack.Meanwhile, FDA provides a new solution for above problems. This paper uses theregression model and PCA model of FDA to analyze the relationship between CPI andits influencing factors.This paper chooses data from2007to2011as sample data, then fits them intofunctional data after preprocessing and constructs CPI influencing factors modelbased on the Concurrent model of FDA. After that, detailed analysis of everyinfluencing factors and CPI components’ weights analysis is made. Afterwards, thispaper uses PCA of FDA to analyze internal and external factors and a new CPIinfluencing model is constructed. At last, the relevant policy recommendations abouthow to stable price level based on model result are proposed. Finally, this papersummarizes the defects and gives directions for further research.The model result showes that the coefficient functions of every influencingfactors of CPI appears obvious fluctuation. Among8internal factors, Food has themost important effects on CPI, Residence and Household Facilities, Articles andServices takes second place, Tobacco, Liquor and Articles is the least one. Besides,the CPI components’ weights mainly differences between model result and existingweights comes from Food and Residence. Among4external factors, SHIBOR, REERand M2have important effects on CPI, GDP is the least one. Furthermore, their firstprincipal component functions are similar with fluctuation. Besides, comparing withexternal influencing factors, internal influencing factors have an important effect onCPI.The methods and conclusions of this paper provides new ideas and methods foranalyzing the relationship between CPI and its influencing factors, and also for otherkinds economic problems which explains the relationship between economic indexsand their influencing factors. Besides, the policy suggestions about how to stable pricelevel provide theoretical basis and decision support for government.