Price Indexes

Price Indexes

In their our first book (1972), Frank Fisher and I provided an extension of the cost-of-living theory to include taste and quality change. Our 1972 book also provides a theory for the GDP-deflator, which turns out to be isomorphic to the Könus cost-of-living theory.

In our second book, Frank Fisher and I (1998) provide a new and path-breaking approach to production price indexes. Only in the simplest cases is their theory isomorphic to Könus theory. In general, the analysis depends on the point of view (the firm, the industry, the sector, or the economy) and on the prevailing form of industrial organization.

It remains to re-evaluate consumer price indexes form the viewpoint of our 1998 book. There must be implications of the Fisher-Shell theory for the construction of consumer commodity subindexes, group indexes (north versus south, poor versus rich, etc.), demographic indexes (old versus young), etc.


  • “Taste and Quality Change in the Pure Theory of the True Cost-of-Living Index” (with Franklin M. Fisher) in Value, Capital and Growth (J.N> Wolfe, ed.), Edinburg: Edinburgh University Press, 1968, 97-139. Reprinted in Price Indexes and Quality Change (Z. Griliches, ed.), Cambridge, Massachusetts: Harvard University Press, 1971, 16-54. Also appears as Essay I in the Economic Theory of Price Indices: Two Essays on the Effects of Taste, Quality and Technological Change (by Franklin M. Fisher and Karl Shell), New York: Academic Press, 1972, 1-48.
  • The Economic Theory of Price Indices: Two Essays on the Effects of Taste, Quality, and Technological Change (with Franklin M. Fisher), New York: Academic Press, 1972. ISBN: 0122577507.
  • “Some Reflections on the Theoretical Underpinnings of Price Indexes of the WPI-Type,” mimeo., University of Pennsylvania, Philadelphia, prepared for the Bureau of Labor Statistics round-table discussion of the industrial price program (held in Washington, D.C. on October 17, 1975), October 3, 1975.
  • Economic Analysis of Production Price Indexes (with Franklin M. Fisher), New York: Cambridge University Press (hardcover ISBN 0521554160, and softcover, ISBN 0521556236), 1998.