The QU-method: A new methodology for processing scanner data

This paper presents a new price index method for processing electronic transaction (scanner) data. Price indices are calculated as a ratio of a turnover index and a weighted quantity index. Product weights of quantities sold are computed from the deflated prices of each month in the current publication year. New products can be timely incorporated without price imputations, so that all transactions can be processed. Product weights are monthly updated and are used to calculate direct indices with respect to a fixed base month. Price indices are free of chain drift by this construction. The results are robust under departures from the methodological choices. The method is part of the Dutch CPI since January 2016, when it was first applied to mobile phones.