The Reserve Bank of India, in a working paper titled 'Data Gaps in State-Level Inflation: An Assessment for the Covid Period', uses household survey data to derive state-wise inflation estimates during four pandemic months due to missing official figures.
On March 1st, 2011, the Reserve Bank of India (RBI) initiated its Working Papers series. These papers present research in progress of RBI staff members and at times external co-authors, providing a platform for discussion and debate. The working paper titled 'Data Gaps in State-Level Inflation: An Assessment for the Covid Period', published on a specific date, was authored by Purnima Shaw and R. K. Sinha.
During the Covid-19 pandemic outbreak, the collection and compilation of official statistics faced significant challenges due to restrictions worldwide. As a result, imputed price indices for India's official inflation were only released at the aggregate level for April and May 2020. For the same months in 2021, as well as April and May of 2020, state-wise official inflation figures remained unavailable.
To address this data gap, the RBI paper utilizes the Inflation Expectations Survey of Households (IESH) granular data to derive State-wise CPI-U inflation estimates for these four pandemic months. The IESH was conducted bimonthly and disseminated during the pandemic months. Using the distributions of centre-wise urban consumers’ inflation perceptions, three months ahead inflation expectations, and past State-wise realized CPI-U inflation figures, the paper derives estimates for the State-wise official inflation pertaining to the specified Covid months.
These state-wise inflation estimates closely follow the all-India official CPI inflation series when aggregated. The importance of these estimates is highlighted as they can be potentially useful for future research involving state-level inflation time-series data in the current inflation targeting regime.
Source:
Reserve Bank of India
