A Modified Consumer Price Index

Gonglin Yuan, Xiangrong Li

.

DOI: 10.4236/me.2010.12011                

Abstract

It is well known that the Consumer Price Index (CPI), as a Laspeyrestype index, attempts to measure the average change in the prices paid by urban consumers for a fixed market of goods and services, and new samples for most item categories are routinely introduced over time to keep the CPI sample representative of consumer spending patterns. The CPI normally overstates the true rate of increase of the cost of living. In this paper, our main objective is to propose a new measurement in the CPI which combines with the Gross Domestic Product (GDP). This new method will make the bias effectively decreased.

Keywords

Consumer Price Index, Gross Domestic Product, Fixed Market Basket

Conflicts of Interest

The authors declare no conflicts of interest.

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