Hostname: page-component-8448b6f56d-42gr6 Total loading time: 0 Render date: 2024-04-17T07:15:55.028Z Has data issue: false hasContentIssue false


Published online by Cambridge University Press:  31 May 2011


This essay argues that beneath the superficial linearity of the history of neoclassical price index theory lie important conceptual ruptures that are linked to the ordinal revolution, including a radical transformation in the core objective for cost-of-living indexes. Revealing these ruptures produces a more accurate history of both the development of neoclassical price index theory and its reception. Furthermore, we can recognize how transformations in this theory have made cost-of-living indexes more coherent with existing traditions of empirical macroeconomics even as they may have reduced the indexes’ suitability for other functions, notably adjusting income payments.

Research Articles
Copyright © The History of Economics Society 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)



Papers of Katherine P. Ellickson, Walter Reuther Library, Wayne State University, Detroit, MI.

Records of the U.S. Bureau of Labor Statistics (BLS), Record Group 257, U.S. National Archives II, College Park, MD.

Records of the Office of Management and Budget (OMB) Record Group 51, U.S. National Archives II, College Park, MD.


Adams, Thomas S. 1901. “Index Numbers and the Standard of Value.” Journal of Political Economy 10(1): 131.CrossRefGoogle Scholar
Adams, Thomas S. 1902. “Index Numbers and the Standard of Value, II.” Journal of Political Economy 10(2): 193213.CrossRefGoogle Scholar
Aldrich, John. 1992. “Probability and Depreciation: A History of the Stochastic Approach to Index Numbers.” History of Political Economy 24(3): 657687.CrossRefGoogle Scholar
Allen, R.G.D. 1933. “On the Marginal Utility of Money and Its Application.” Economica 40(May): 186209.CrossRefGoogle Scholar
Allen, R.G.D. 1949. “The Economic Theory of Index Numbers.” Economica 16(63): 197203.CrossRefGoogle Scholar
Allen, R.G.D. 1975. Index Numbers in Theory and Practice. Chicago: Aldine.CrossRefGoogle Scholar
Backhouse, Roger E. 2003. “The Stabilization of Price Theory, 1920–1955.” In Samuels, Warren J., Biddle, Jeff E., and Davis, John B., eds., A Companion to the History of Economic Thought. Malden, Mass.: Blackwell, pp. 308324.CrossRefGoogle Scholar
Banzhaf, H. Spencer. 2001. “Quantifying the Qualitative: Quality-Adjusted Price Indexes in the United States, 1915–1961.” In Klein, Judy L. and Morgan, Mary S., The Age of Economic Measurement. Durham: Duke University Press, pp.345370.Google Scholar
Banzhaf, H. Spencer. 2004. “The Form and Function of Price Indexes: A Historical Accounting.” History of Political Economy 36(4): 589616.CrossRefGoogle Scholar
vonBortkiewicz, L. 1932. “Die Kaufkraft des Geldes und ihreMessung.” Nordic Statistical Journal 4: 168.Google Scholar
Boskin, Michael J., Dulberger, Ellen R., et al. . 1996. Toward a More Accurate Measure of the Cost of Living: Final Report to the Senate Finance Committee from the Advisory Commission to Study the Consumer Price Index. Washington, DC: U.S. Government Printing Office.Google Scholar
Bowley, Arthur L. 1919. “The Measurement of Changes in the Cost of Living.” Journal of the Royal Statistical Society 82,3(May): 343372.CrossRefGoogle Scholar
Bowley, Arthur L. 1920. “Cost of Living and Wage Determination.” Economic Journal 30, 117(March): 114117.CrossRefGoogle Scholar
Bowley, Arthur L. 1928. “Notes on Index Numbers.” Economic Journal 38, 150(June): 216237.CrossRefGoogle Scholar
Clark, John M. 1918. “Economics and Modern Psychology I.” Journal of Political Economy 26(1): 130.CrossRefGoogle Scholar
Collins, Robert M. 2000. More: The Politics of Economic Growth in Postwar America. New York: Oxford University Press.CrossRefGoogle Scholar
Cooter, Robert, and Rappoport, Peter. 1984. “Were the Ordinalists Wrong About Welfare Economics?Journal of Economic Literature 22(2): 507530.Google Scholar
Diewert, W. Erwin. 1976. “Exact and Superlative Index Numbers.” Journal of Econometrics 4, 2(May): 115145.CrossRefGoogle Scholar
Diewert, W. Erwin. 1983. “The Theory of the Cost-of-Living Index and the Measurement of Welfare Change.” In Diewert, W. E. and Montmarquette, C., eds., Price Level Measurement: Proceedings from a Conference Sponsored by Statistics Canada. Ottawa: Minister of Supply and Services Canada, pp.163233.Google Scholar
Diewert, W. Erwin. 1993. “The Early History of Price Index Research.” In Erwin Diewert, W. and Nakamura, Alice O., eds., Essays in Index Number Theory.Volume 1. Amsterdam: Elsevier Science Publishers, pp.3365.Google Scholar
Diewert, W. Erwin. 1998. “Index Number Issues in the Consumer Price Index.” Journal of Economic Perspectives 12, 1(Winter): 4758.CrossRefGoogle Scholar
Douglas, Paul H. 1930. Real Wages in the United States, 1890–1926. Boston: Houghton Mifflin Co.Google Scholar
Edgeworth, Francis Y. 1894. “Recent Writings on Index Numbers.” Economic Journal 4(13): 158165.CrossRefGoogle Scholar
Edgeworth, Francis Y. 1923. “The Doctrine of Index Numbers According to Mr. Correa Walsh.” Economic Journal 33, 131(September): 343351.CrossRefGoogle Scholar
Edgeworth, Francis Y. 1925. “The Element of Probability in Index-Numbers.” Journal of the Royal Statistical Society 88, 4(July): 557575.CrossRefGoogle Scholar
Edgeworth, Francis Y. [1887–1889] 1925.“Measurement of the Change in the Value of Money.” In Edgeworth, Francis Y., Papers Relating to Political Economy. London: Macmillan & Co., pp.195297.Google Scholar
Edgeworth, Francis Y. 1925. “The Plurality of Index-Numbers.” Economic Journal 35, 139(September): 379388.CrossRefGoogle Scholar
Fetter, Frank. 1895. “The Exploitation of Theories of Value in the Discussion of the Standard of Deferred Payments.” Annals of the American Academy of Political and Social Science (May): 882896.Google Scholar
Fisher, Franklin M., and Shell, Karl. 1968. “Taste and Quality Change in the Pure Theory of the True Cost-of-Living Index.” In Wolfe, J. N., ed., Value, Capital, and Growth: Papers in Honour of Sir John Hicks. Edinburgh: University of Edinburgh Press, pp. 97139.Google Scholar
Fisher, Franklin M., and Shell, Karl. 1972. The Economic Theory of Price Indices. New York: Academic Press.Google Scholar
Fisher, Irving. 1911. The Purchasing Power of Money: Its Determination and Relation to Credit Interest and Crises. New York: Macmillan Co.Google Scholar
Fisher, Irving. 1922. The Making of Index Numbers: A Study of Their Variety, Tests, and Reliability. Boston: Houghton Mifflin Co.Google Scholar
Frisch, Ragnar. 1936. “Annual Survey of General Economic Theory: The Problem of Index Numbers.” Econometrica 4, 1(January): 138.CrossRefGoogle Scholar
Frisch, Ragnar. 1937. “Methods of Measuring the Relative Cost of Living.” Mimeograph. Washington: DC, July 27, 1937. Source: Price indexes—technical notes, box 218, Statistical Records Relating to Particular Subject Areas, OMB.Google Scholar
Frisch, Ragnar. 1954. “Some Basic Principles of Price of Living Measurements.” Econometrica 22, 4(October): 407421.CrossRefGoogle Scholar
General Motors Corporation. 1939. Dynamics of Automobile Demand. New York: General Motors Corporation.Google Scholar
Gilbert, Milton. 1961. “Quality Changes and Index Numbers.” Economic Development and Cultural Change 9, 3(April): 287294.CrossRefGoogle Scholar
Gilbert, Milton, Jaszi, George, et al. . 1948. “Objectives of National Income Measurement: A Reply to Professor Kuznets.” The Review of Economics and Statistics 30(3): 179195.CrossRefGoogle Scholar
Gillingham, Robert. 1974. “A Conceptual Framework for the Consumer Price Index.” Proceedings of the Business and Economic Statistics Section of the American Statistical Association, pp. 246252.Google Scholar
Gini, Corrado. 1924. “QuelquesConsidérations au Sujet de la Construction des Nombres Indices des Prix et des Questions Analogues.” Metron 4: 3162.Google Scholar
Greenlees, John S. 2001. “The U.S. CPI and the Cost-of-Living Objective.” Joint ECE/ILO Meeting on Consumer Price Indexes, Geneva, Switzerland, November 2001.Google Scholar
Haberler, Gottfried. 1927. Der Sinn der Indexzahlen.Tübingen: J.C.B. Mohr.Google Scholar
Hennipman, Pieter. 1987. “A Tale of Two Schools: Comments on a New View of the Ordinalist Revolution.” De Economist 135(2): 141162.CrossRefGoogle Scholar
Hicks, J. R. 1940.“The Valuation of the Social Income.” Economica 7(26): 105124.CrossRefGoogle Scholar
Hicks, J. R., and Allen, R.G.D.. 1934. “A Reconsideration of the Theory of Value. Parts I & II.” Economica 1(1): 5276; (2): 196–219.CrossRefGoogle Scholar
Jacobs, Meg. 2005. Pocketbook Politics: Economic Citizenship in Twentieth-Century America. Princeton: Princeton University Press.Google Scholar
Keynes, John Maynard. 1930. A Treatise on Money. New York: Harcourt Brace & Co.Google Scholar
Konüs, A.A. [1924] 1939.“The Problem of the True Index of the Cost of Living.” Econometrica 7, 1(January): 1029.CrossRefGoogle Scholar
Konüs, A.A. 1968. “The Theory of the Consumer Price Indexes and the Problem of the Comparison of the Cost of Living in Time and Space.” In The Social Sciences: Problems and Orientations. UNESCO. The Hague: Mouton & Co., pp.93107.Google Scholar
Kuznets, Simon. 1948. “National Income: A New Version.” The Review of Economics and Statistics 30(3): 151179.CrossRefGoogle Scholar
Merrian, Lucius S. 1893. “The Theory of Final Utility in its Relation to Money and the Standard of Deferred Payments.” Annals of the American Academy of Political and Social Science (January): 483501.Google Scholar
Mills, Frederick C., Wright Bakke, E., et al. . 1943. “An Appraisal of the U.S. Bureau of Labor Statistics Cost-of-Living Index.” Journal of the American Statistical Association 38, 224(December): 387405.CrossRefGoogle Scholar
Morgan, Mary S., and Rutherford, Malcolm, eds. 1998. From Interwar Pluralism to Postwar Neoclassicism. Durham: Duke University Press.Google Scholar
National Bureau of Economic Research. 1961. The Price Statistics of the Federal Government: Review, Appraisal, and Recommendations. New York: National Bureau of Economic Research.Google Scholar
Perlman, Mark. 1987. “Political Purpose and National Accounts.” In Alonso, William and Starr, Paul, eds., The Politics of Numbers. New York: Russell Sage Foundation, pp.133151.Google Scholar
Pigou, A. C. 1912. Wealth and Welfare. London: Macmillan & Co.Google Scholar
Pigou, A. C. 1920. The Economics of Welfare. London: Macmillan and Co.Google Scholar
Pigou, A. C. 1924. The Economics of Welfare. Second edition. London: Macmillan & Co.Google Scholar
Pollak, Robert A. 1989. The Theory of the Cost-of-Living Index. New York: Oxford University Press.Google Scholar
Robbins, Lionel. 1932. An Essay on the Nature and Significance of Economic Science. London: Macmillan & Co.Google Scholar
Rutherford, Malcolm. 2000. “Understanding Institutional Economics: 1918–1929.” Journal of the History of Economic Thought 22(3): 277308.CrossRefGoogle Scholar
Samuelson, Paul A. 1947. Foundations of Economic Analysis. Cambridge, Mass.: Harvard University Press.Google Scholar
Samuelson, Paul A., and Swamy, S.. 1974. “Invariant Economic Index Numbers and Canonical Duality: Survey and Synthesis.” American Economic Review 64(4): 566593.Google Scholar
Schultz, Henry. 1939. “A Misunderstanding in Index-Number Theory: The True Konüs Condition on Cost-of-Living Index Numbers and Its Limitations.” Econometrica 7, 1(January): 19.CrossRefGoogle Scholar
Schumpeter, Joseph Alois. 1954. History of Economic Analysis. New York: Oxford University Press.Google Scholar
Sen, Amartya. 1979. “The Welfare Basis of Real Income Comparisons: A Survey.” Journal of Economic Literature 17(1): 145.Google Scholar
Sidgwick, Henry. 1887. The Principles of Political Economy. Second edition. London: Macmillan and Co.Google Scholar
Staehle, Hans. 1934. International Comparison of Food Costs. Geneva: International Labour Office.Google Scholar
Staehle, Hans. 1935. “A Development of the Economic Theory of Price Index Numbers.” Review of Economic Studies 2, 3(June): 163188.CrossRefGoogle Scholar
Staehle, Hans. 1937. “A General Method for the Comparison of the Price of Living.” The Review of Economic Studies 4(3): 205214.CrossRefGoogle Scholar
Stapleford, Thomas A. 2003. “‘The Most Important Single Statistic’: The Consumer Price Index and American Political Economy, 1880–1955.” PhD dissertation, Harvard University, Cambridge, MA.Google Scholar
Stapleford, Thomas A. 2009. The Cost of Living in America: A Political History of Economic Statistics, 1880–2000. New York: Cambridge University Press.Google Scholar
Stigler, George J. 1952. The Theory of Price.Revised edition. New York: Macmillan Co.Google Scholar
Triplett, Jack E. 2001. “Should the Cost-of-Living Index Provide the Conceptual Framework for a Consumer Price Index?Economic Journal 111, 472(June): F311F334.CrossRefGoogle Scholar
U.S. Bureau of Labor Statistics. 1940. “The Bureau of Labor Statistics’ New Index of Cost of Living.” Monthly Labor Review 51, 2(August): 367404.Google Scholar
U.S. Congress. Joint Economic Committee. 1959. Staff Report on Employment, Growth, and Price Levels. 86th Cong., 1st sess. Washington, DC: U.S. Government Printing Office.Google Scholar
U.S. Congress. Joint Economic Committee. 1961. Government Price Statistics: Hearings before the Subcommittee on Economic Statistics of the Joint Economic Committee. 87th Cong., 1st sess. Washington, DC: U.S. Government Printing Office.Google Scholar
U.S. Congress. Joint Economic Committee. 1966. Government Price Statistics: Hearings before the Subcommittee on Economic Statistics. 89th Cong., 2nd sess. Washington, DC: U.S. Government Printing Office.Google Scholar
Veblen, Thorstein. 1899. The Theory of the Leisure Class. New York: Macmillan Co.Google Scholar
Walsh, Correa M. 1901. The Measurement of General Exchange-Value. New York: Macmillan Co.Google Scholar
Walsh, Correa M. 1921. The Problem of Estimation. London: P.S. King & Son, Ltd.Google Scholar
Walsh, Correa M. 1924. “Professor Edgeworth’s Views on Index Numbers.” Quarterly Journal of Economics 38, 3(May): 500519.CrossRefGoogle Scholar
Weber, Christian E. 2001. “Pareto and the 53 Percent Ordinal Theory of Utility.” History of Political Economy 33(3): 541576.CrossRefGoogle Scholar
Williams, Faith M., and Hoover, Ethel D.. 1946. “Measuring Price and Quality of Consumers’ Goods.” Journal of Marketing 10(4): 354369.CrossRefGoogle Scholar