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https://github.com/marberts/gpindex

An R package for calculating generalized price and quantity indexes
https://github.com/marberts/gpindex

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An R package for calculating generalized price and quantity indexes

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---
output: github_document
---

```{r, include = FALSE}
knitr::opts_chunk$set(
collapse = TRUE,
comment = "#>",
out.width = "100%"
)
```

# Generalized Price and Quantity Indexes gpindex website

[![CRAN status](https://www.r-pkg.org/badges/version/gpindex)](https://cran.r-project.org/package=gpindex)
[![gpindex status badge](https://marberts.r-universe.dev/badges/gpindex)](https://marberts.r-universe.dev/gpindex)
[![Conda Version](https://img.shields.io/conda/vn/conda-forge/r-gpindex.svg)](https://anaconda.org/conda-forge/r-gpindex)
[![R-CMD-check](https://github.com/marberts/gpindex/workflows/R-CMD-check/badge.svg)](https://github.com/marberts/gpindex/actions)
[![codecov](https://codecov.io/gh/marberts/gpindex/graph/badge.svg?token=TL7V9QO0BH)](https://app.codecov.io/gh/marberts/gpindex)
[![DOI](https://zenodo.org/badge/261861375.svg)](https://zenodo.org/doi/10.5281/zenodo.10097742)

Tools to build and work with bilateral generalized-mean price indexes (and by extension quantity indexes), and indexes composed of generalized-mean indexes (e.g., superlative quadratic-mean indexes, GEKS). Covers the core mathematical machinery for making bilateral price indexes, computing price relatives, detecting outliers, and decomposing indexes, with wrappers for all common (and many uncommon) index-number formulas. Implements and extends many of the methods in Balk (2008), von der Lippe (2007), and the CPI manual (2020).

## Installation

Get the stable release from CRAN.

```{r, eval = FALSE}
install.packages("gpindex")
```

The development version can be installed from R-Universe

```{r, eval = FALSE}
install.packages("gpindex", repos = c("https://marberts.r-universe.dev", "https://cloud.r-project.org"))
```

or directly from GitHub.

```{r, eval = FALSE}
pak::pak("marberts/gpindex")
```

## Usage

```{r}
library(gpindex)

# Start with some data on prices and quantities for 6 products
# over 5 periods
price6
quantity6

# We'll only need prices and quantities for a few periods
p0 <- price6[[1]]
p1 <- price6[[2]]
p2 <- price6[[3]]
q0 <- price6[[1]]
q1 <- price6[[2]]

# There are functions to calculate all common price indexes,
# like the Laspeyres and Paasche index
laspeyres_index(p1, p0, q0)
paasche_index(p1, p0, q1)

# The underlying mean functions are also available, as usually
# only price relatives and weights are known
s0 <- p0 * q0
s1 <- p1 * q1

arithmetic_mean(p1 / p0, s0)
harmonic_mean(p1 / p0, s1)

# The mean representation of a Laspeyres index makes it easy to
# chain by price-updating the weights
laspeyres_index(p2, p0, q0)

arithmetic_mean(p1 / p0, s0) *
arithmetic_mean(p2 / p1, update_weights(p1 / p0, s0))

# The mean representation of a Paasche index makes it easy to
# calculate percent-change contributions
harmonic_contributions(p1 / p0, s1)

# The ideas are the same for more exotic indexes,
# like the Lloyd-Moulton index

# Let's start by making some functions for the Lloyd-Moulton index
# when the elasticity of substitution is -1 (an output index)
lloyd_moulton <- lm_index(-1)
quadratic_mean <- generalized_mean(2)
quadratic_update <- factor_weights(2)
quadratic_contributions <- contributions(2)

# This index can be calculated as a mean of price relatives
lloyd_moulton(p1, p0, q0)
quadratic_mean(p1 / p0, s0)

# Chained over time
lloyd_moulton(p2, p0, q0)
quadratic_mean(p1 / p0, s0) *
quadratic_mean(p2 / p1, quadratic_update(p1 / p0, s0))

# And decomposed to get the contributions of each relative
quadratic_contributions(p1 / p0, s0)
```

## Prior work

There are a number of R packages on the CRAN that implement the standard index-number formulas (e.g., **IndexNumber**, **productivity**, **IndexNumR**, **micEconIndex**, **PriceIndices**). While there is support for a large number of index-number formulas out-of-the box in this package, the focus is on the tools to easily make and work with any type of generalized-mean price index. Consequently, compared to existing packages, this package is suitable for building custom price/quantity indexes, calculating indexes with sample data, decomposing indexes, and learning about or researching different types of index-number formulas.

## References

Balk, B. M. (2008). *Price and Quantity Index Numbers*. Cambridge University Press.

IMF, ILO, Eurostat, UNECE, OECD, and World Bank. (2020). *Consumer Price Index Manual: Concepts and Methods*. International Monetary Fund.

von der Lippe, P. (2007). *Index Theory and Price Statistics*. Peter Lang.