Measuring Prices in a Dynamic Economy: Re-Examining the CPI

Because the Consumer Price Index (CPI) has many important uses and needs to be highly reliable and accurate, it is a work in progress, always being improved. This report, from the Study Group on the Consumer Price Index, focuses on the problems of economic measurement as they relate to the CPI and makes nine recommendations for improvement.

Topics covered:

• Background: Transforming the CPI from a static statistic to a dynamic measure
• How many CPIs?
• Substitution, quality, and outlet rotation bias
• Consumer expenditure weights
• Which consumers?
• More frequent reviews
• Funding
• Unfinished business

Members of The Conference Board Study Group on the CPI include:

• Paul W. McCracken, University Professor Emeritus, Graduate School of Business Administration, University of Michigan
• James Tobin, Sterling Professor of Economics - Emeritus, Yale University
• Charles R. Hulten, Professor of Economics, University of Maryland
• Marvin Kosters, Director, Economic Policy Studies, American Enterprise Institute
• Robert D. Reischauer, Senior Fellow, The Brookings Institution