The Implementation of a Multilateral Price Index Method for Scanner Data in the Luxembourg CPI

Scanner data has been introduced in the Luxembourg CPI in 2018 using the “dynamic basket” method. The drawbacks of this method lied in its inability to incorporate all available products and in its inability to directly incorporate the selected products’ turnover information into price index calculations. To avoid these drawbacks, while also avoiding a possible chain drift, multilateral price index methods can be used. In this research, several selected multilateral price index methods are analysed as possible replacement methods for the “dynamic basket” method. With this in mind, the decision of “GEKS HASP” on 25 months’ window setup introduction in the Luxembourg CPI from January 2021 onwards is discussed and justified.

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