Measuring real consumption and consumer price index bias under lockdown conditions.

Abstract

Millions of goods and services are now unavailable in many countries due to the current coronavirus pandemic, dramatically impacting on the construction of key economic statistics used for informing policy. This situation is unprecedented; hence, methods to address it have not previously been developed. Current advice to national statistical offices from the International Monetary Fund, Eurostat and the United Nations is shown to result in downward bias in the consumer price index (CPI) and upward bias in real consumption. We conclude that, to produce a meaningful CPI within the lockdown period, it is necessary to establish a continuous consumer expenditure survey.