THE CONSUMER PRICE INDEX
Consumer Price Index - A Worked Example I A Level and IB Economics - Bing video
Consumer price index
Example
Index numbers allow us to make yearly comparisons
The base year is given an index value of 100
If the CPIH is 105 it means there has been a 5% rise;
If the CPIH is 97 it means there has been a 3% fall
A rise in the CPI means that inflation exists
3/30/2023 24
, CPI CALCULATION
Category Price Index Weighting Price x Weight
Food 104 19 1976
Alcohol & Tobacco 110 5 550
Clothing 96 12 1152
Transport 108 14 1512
Housing 106 23 2438
Leisure Services 102 9 918
Household Goods 95 10 950 the sum
the sum
of
of the
Other Items 114 8 912 price x
weight
weight
100 10408
3/30/2023 25
Consumer Price Index - A Worked Example I A Level and IB Economics - Bing video
Consumer price index
Example
Index numbers allow us to make yearly comparisons
The base year is given an index value of 100
If the CPIH is 105 it means there has been a 5% rise;
If the CPIH is 97 it means there has been a 3% fall
A rise in the CPI means that inflation exists
3/30/2023 24
, CPI CALCULATION
Category Price Index Weighting Price x Weight
Food 104 19 1976
Alcohol & Tobacco 110 5 550
Clothing 96 12 1152
Transport 108 14 1512
Housing 106 23 2438
Leisure Services 102 9 918
Household Goods 95 10 950 the sum
the sum
of
of the
Other Items 114 8 912 price x
weight
weight
100 10408
3/30/2023 25
