Problems of operationalizing the concept of a cost-of-living index

The aim of our paper is to discuss the problems of operationalizing the concept of a .cost-of-living-index. (COLI). For this purpose we are first undertaking a theoretical analysis of Diewert’s theory of superlative index numbers as one possible approach to approximate a COLI. We show that Diewert.s superlative index approach is arguable in many points and that the approach requires restrictive assumptions which are not likely to be met in observed households behaviour. To get a better idea about the deviation of observed households behaviour from the neoclassical assumptions about utility maximizing behaviour, we are estimating an Almost Ideal Demand System and a Quadratic Almost Ideal Demand System with cross section micro data from the German income and expenditure survey. Using the results of the demand system estimations we calculate COLIs and compare them with superlative index numbers and the Laspeyres price index.cost-of-living index; superlative index numbers; Diewert; demand systems

Computing stationary free-surface shapes in microfluidics

A finite-element algorithm for computing free-surface flows driven by arbitrary body forces is presented. The algorithm is primarily designed for the microfluidic parameter range where (i) the Reynolds number is small and (ii) force-driven pressure and flow fields compete with the surface tension for the shape of a stationary free surface. The free surface shape is represented by the boundaries of finite elements that move according to the stress applied by the adjacent fluid. Additionally, the surface tends to minimize its free energy and by that adapts its curvature to balance the normal stress at the surface. The numerical approach consists of the iteration of two alternating steps: The solution of a fluidic problem in a prescribed domain with slip boundary conditions at the free surface and a consecutive update of the domain driven by the previously determined pressure and velocity fields. ...Comment: Revised versio