Article: Study on Taiwan consumers' cost of living: an application of the additive Tornqvist price index formula.

I. INTRODUCTION

There are very few empirical studies on Taiwan consumers' cost of living; however, the issue is becoming increasingly important in Taiwan because many economic and social welfare policies already include escalator clauses related to cost of living in order to take the impact of inflation on consumers' real purchasing power into consideration. (1) Normally, the escalator clauses only use the officially published Consumer Price Index (CPI) as the basis for adjustments due to changes in the cost of living in Taiwan. Since the CPI, which is computed with the Laspeyres index formula, uses consumers' base-period commodity expenditure shares as the ...

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