The plutocratic bias in the CPI : evidence from Spain

We define the plutocratic bias as the difference between the inflation measured according to the current official CPI and a democratic index in which all households receive the same weight. (i) We estimate that during the 1990s the plutocratic bias in Spain amounts to 0.055 per cent per year, or about one third of the classical substitution bias estimated by the Boskin Commission for the U.S. (ii) We find that a 16-dimensional commodity space can be conveniently reduced to 3 dimensions, consisting of a luxury good and two necessities. The price behavior of these 3 goods provides a convincing explanation of the oscillations experimented by the plutocratic bias. (iii) Finally, the fact that the plutocratic bias is positive during this period, implies that the change in money income inequality is between 2 and 5 per cent greater than the change in real income inequality. We study the robustness of these results to the time period considered and to the definition of the group index which serves as an alternative to the CPI. We estimate that during the 1980s and the second part of the 1970s in Spain, the plutocratic bias is 0.033 and 0.239 per cent per year, respectively

The Laspeyres bias in the Spanish consumer price index

The CPI compares the cost of acquiring a reference quantity vector at current and base prices. Such reference vector is the vector of mean quantities actually bought by a reference population, whose consumption patterns are investigated during a period t prior to the index base period 0. In this paper we show that unless one takes into account the price change between these two dates, the CPI ceases to be a proper statistical price index of the Laspeyres type. Among several negative consequences, the most important is that this omission produces a bias in the measurement of inflation which we call the `Laspeyres bias.' Using Spanish data, we estimate that, e.g., from 1992 to 1998, the size of the Laspeyres bias is -0.061 per cent per year, or about 6 per cent (in absolute terms) of the positive bias estimated by the Boskin commission for the U.S., which is equal to 1.1 per cent per year. The Laspeyres bias in shorter time periods reached -0.122, and -0.108 per cent per year in 1992, and 1997, respectivel

The plutocratic gap in the CPI : evidence from Spain

The plutocratic gap is defined as the difference between the inflation measured according to the current official consumer price index (CPI) and a democratic index in which all households receive the same weight. During 1992–97, the plutocratic gap in Spain averaged 0.055 percentage points a year. Since positive and negative gaps cancel out, however, the average absolute gap is significantly larger: 0.090 percentage points a year. For the purposes of accounting for the plutocratic gap, a 53-dimensional commodity space can be conveniently reduced to two dimensions: a luxury index and a necessities index.Publicad

Optimal modularity and memory capacity of neural reservoirs

The neural network is a powerful computing framework that has been exploited by biological evolution and by humans for solving diverse problems. Although the computational capabilities of neural networks are determined by their structure, the current understanding of the relationships between a neural network's architecture and function is still primitive. Here we reveal that neural network's modular architecture plays a vital role in determining the neural dynamics and memory performance of the network of threshold neurons. In particular, we demonstrate that there exists an optimal modularity for memory performance, where a balance between local cohesion and global connectivity is established, allowing optimally modular networks to remember longer. Our results suggest that insights from dynamical analysis of neural networks and information spreading processes can be leveraged to better design neural networks and may shed light on the brain's modular organization

The Plutocratic Gap in the CPI: Evidence from Spain

The plutocratic gap is defined as the difference between the inflation measured according to the current official consumer price index (CPI) and a democratic index in which all households receive the same weight. During 1992-97, the plutocratic gap in Spain averaged 0.055 percentage points a year. Since positive and negative gaps cancel out, however, the average absolute gap is significantly larger: 0.090 percentage points a year. For the purposes of accounting for the plutocratic gap, a 53-dimensional commodity space can be conveniently reduced to two dimensions: a luxury index and a necessities index. Copyright 2003, International Monetary Fund

Distributive aspects of the quality change bias in the CPI.

This paper shows that the richer households are significantly more affected by the quality-change bias (QCB) in the CPI. The empirical analysis combines the detailed information pertaining to the size of the QCB for the US with household-specific CPIs for Spain.Plutocratic gap; Money inequality; Price index; CPI; Quality bias;

Information flow through a model of the C. elegans klinotaxis circuit

Understanding how information about external stimuli is transformed into behavior is one of the central goals of neuroscience. Here we characterize the information flow through a complete sensorimotor circuit: from stimulus, to sensory neurons, to interneurons, to motor neurons, to muscles, to motion. Specifically, we apply a recently developed framework for quantifying information flow to a previously published ensemble of models of salt klinotaxis in the nematode worm C. elegans. The models are grounded in the neuroanatomy and currently known neurophysiology of the worm. The unknown model parameters were optimized to reproduce the worm's behavior. Information flow analysis reveals several key principles underlying how the models operate: (1) Interneuron class AIY is responsible for integrating information about positive and negative changes in concentration, and exhibits a strong left/right information asymmetry. (2) Gap junctions play a crucial role in the transfer of information responsible for the information symmetry observed in interneuron class AIZ. (3) Neck motor neuron class SMB implements an information gating mechanism that underlies the circuit's state-dependent response. (4) The neck carries non-uniform distribution about changes in concentration. Thus, not all directions of movement are equally informative. Each of these findings corresponds to an experimental prediction that could be tested in the worm to greatly refine our understanding of the neural circuit underlying klinotaxis. Information flow analysis also allows us to explore how information flow relates to underlying electrophysiology. Despite large variations in the neural parameters of individual circuits, the overall information flow architecture circuit is remarkably consistent across the ensemble, suggesting that information flow analysis captures general principles of operation for the klinotaxis circuit

The Laspeyres bias in the Spanish consumer price index.

The CPI compares the cost of acquiring a reference quantity vector at current and base prices. Such reference vector is the vector of mean quantities actually bought by a reference population, whose consumption patterns are investigated during a period tau prior to the index base period 0. This paper shows that unless the price change between these two dates is taken into account, the CPI ceases to be a proper statistical price index of the Laspeyres type. Among several negative consequences, the most important is that this omission produces a bias in the measurement of inflation: the 'Laspeyres bias'. Using Spanish data, the size of the Laspeyres bias is estimated at -0.061% per year, during 1992-1998. The Laspeyres bias in shorter time periods reached -0.122% per year in 1992, and -0.108 in 1997.