areppim: information, pure and simple

Glossary of terms

areppim: information, pure and simple

You are here:   areppim >  Glossary of terms >   Consumer price index

Consumer price index

Consumer price index:
  • tracks changes in the cost to the average consumer of buying a "basket" of goods and services;
  • price changes are detected through surveys of the cost of a defined basket of consumer goods and services that may be fixed or may change at specified intervals.
  • Laspeyres index is generally used:
    • Laspeyres formula is identical to a weighted arithmetic average of the current to base period prices,
    • the basket of goods and services of the base period serves as both the weight reference period and the price reference period;
    • the formula is therefore also known as a "base weighted index".
 
The price index is generally used to calculate the Inflation rate.