Is the ECI sensitive to the method of aggregation?(Employment Cost Index)

From: Monthly Labor Review | Date: June 1, 1997| Author: | Copyright information

A study examined the sensitivity of the ECI to the process that aggregates sample data on individual jobs into a single index number. The current process for aggregating ECI was compared with indexes produced using alternative methods. The results indicate that the methodology used in constructing the index does not affect the ECI. However, caution is necessary when applying standard index number analysis to the ECI.

Research by BLS economists indicates that the ECI is not particularly sensitive to the methodology used in constructing the index; also, because changes in the price of ...

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