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CONSUMER PRICE INDEX

Statistics Directorate    
French Equivalent: Indice des prix à la consommation

Definition:
The consumer price index (CPI) measures changes over time in the general level of prices of goods and services that a reference population acquires, uses or pays for consumption.

A consumer price index is estimated as a series of summary measures of the period-to-period proportional change in the prices of a fixed set of consumer goods and services of constant quantity and characteristics, acquired, used or paid for by the reference population. Each summary measure is constructed as a weighted average of a large number of elementary aggregate indices.

Each of the elementary aggregate indices is estimated using a sample of prices for a defined set of goods and services obtained in, or by residents of, a specific region from a given set of outlets or other sources of consumption goods and services.

Context:
The International Conference of Labour Statisticians (ICLS) Resolutions laid down certain international standards for methods for computation of the CPI which contributed to the international comparability of the CPI. The latest (1987) recommendation on CPI was followed by a manual on methods published in 1989. It is aimed at a global audience and covers such important aspects of CPI as its scope, definition of elementary aggregates, the derivation of weights, sampling, procedures for collecting price data, substitution problems, etc.

Since that time, significant developments have been made in the practice of CPI construction. Conse-quently the Sixteenth ICLS, meeting in 1998, recommended that the international standard in CPI should be reviewed, updated and further developed to take into account those developments. The new manual was published in 2004 by the ILO. Among others, it provides considerably more detail, information, explanation and rationalization of CPI methodology and the relevant economic and statistical theory than could be included in the resolution.

International Labour Organization (ILO), 2003. Report III: Consumer Price Indices, Seventeenth International Conference of Labour Statisticians. Available at: see main website

International Labour Organization (ILO), 2008. General report - 18th International Conference of Labour Statisticians. Available at: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/meetingdocument/wcms_099134.pdf.

Source Publication:
International Labour Organization (ILO) Resolutions Concerning Consumer Price Indices Adopted by the 14th International Conference of Labour Statisticians, October-November 1987, para. 2.

Cross References:
Consumer price index (CPI) basket
Producer price index

Hyperlink:
http://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/meetingdocument/wcms_087591.pdf

Statistical Theme: Prices and purchasing power parities - Price indices

Created on Tuesday, September 25, 2001

Last updated on Tuesday, April 16, 2013