Does Location Matter? a Case-Study of the Influence of Geography in Measurement of Gasoline Price Inflation

• Activity Number: 89 - SPEED: Survey Methods, Transportation Studies, SocioEconomics, and General Statistical Methods Part 2
• Type: Contributed
• Date/Time: Sunday, July 28, 2019 : 5:05 PM to 5:50 PM
• Sponsor: Business and Economic Statistics Section
• Author(s): David Popko* and Ilmo Sung.
• Companies: Bureau of Labor Statistics and U.S. Bureau of Labor Statistics

Abstract

The Consumer Price Index (CPI) objective is to measure the change in cost of living experienced by the average urban consumer residing in the United States. Currently, the outlet sample in this measurement is selected via probability sampling proportional to average daily expenditure on items within a core-based-statistical-area (CBSA). This process yields a large variety of outlets in the CPI sample, but the outlets selected remain exclusively a function of the expenditures reported and household sampling weights in CPI’s Telephone-Point-of-Purchase Survey (TPOPS) survey.

Using data collected from GasBuddy.com, we attempt to model the explanatory variables of price change in order to identify possible stratification variables in outlet selection. Focusing on the Washington-Arlington-Alexandria, DC-VA-MD-WV PSU, we calculate one-month price changes for each gas station in the GasBuddy sample. We then apply various statistical techniques to assess the significance of a variety of independent variables constructed using traffic data, driving distances between, population density, income, housing prices, and other while controlling for various geographic flags.