Abstract
Meghan S. O'Malley, Daniell Toth, and Chester Ponikowski (2006)
"Study of Volatility and Smoothing of Estimated
Variances in the Employment Cost Index Program"
The Employment Cost Index (ECI), one of the key products produced
by the National Compensation Survey (NCS) and conducted by the
Bureau of Labor Statistics (BLS), is a Laspeyres index that provides
quarterly and annual measures of the rate of change in compensation
per hour worked including wages and salaries, and employer cost of
employee benefits. Point estimates for ECI variances are produced using
the balanced repeated replication (BRR) procedure and provided
to data users as smoothed estimates in the form of five-year moving
averages of these BRR variance estimates. This paper presents an analysis
of the volatility of the estimated variances as a time series, discussion
of the appropriateness of smoothing, development of exponential
smoothing procedures taking into account specific properties of the
ECI variance estimates, and a comparison of the results.
Last Modified Date: January 9, 2007
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