Why rebase an index

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Sign up using Email and Password. Post as a guest Name. Email Required, but never shown. Featured on Meta. Now live: A fully responsive profile. Linked 4. Related 0. Hot Network Questions. Question feed. Cross Validated works best with JavaScript enabled. Accept all cookies Customize settings. Considering that the basket did not change significantly, especially in terms of food, the direction of inflation will still largely follow that of the previous base year.

The lower rate for February using the base only implies that some items that weighted heavier in are not as important six years later. Your email address will not be published. This site uses Akismet to reduce spam. Learn how your comment data is processed. Alvin P. Share Tweet 0. Pin it 0. Share 0. Leave a Reply Cancel reply Your email address will not be published. Related Posts. Editorial cartoon Opinion. Editorial Opinion. Although Covid has so far killed 5 million people globally, it is not the deadliest disease.

American historian…. Column Opinion. There were no trolls yet when the Jesuit sociologist, John J. Carroll, SJ, began writing on social theory…. When a new item is included in the CPI basket, this does not imply that consumers previously did not purchase this good or service.

It means that the item has become popular enough to warrant inclusion in a sample of representative items. There were two reasons why an item was removed from the basket. Firstly, items were removed if they were no longer popular enough to warrant inclusion in a sample of goods and services. Secondly, items were removed if they belonged to an expenditure category that was over-covered in the basket. Examples of this are matches, clingfilm, carving knife, bottle opener, ironing board, chopping board, sweeping brush, pillow case, tea towel, hammer and screwdriver.

During the update of the basket, it is also possible to modify or extend item descriptions to ensure they continue to accurately represent an expenditure category.

For example, in the new basket there are two items in the basket that cover the purchase of televisions; TV up to 40" and TV greater than 40". In the previous basket the equivalent items were TV small up to 26" and TV mid-range 32"". The item description for potatoes was also amended from a 10kg bag to a 7.

In the area of telecommunications, bundled services have become increasingly popular whereby consumers purchase a package consisting of various combinations of landline telephone services, mobile telephone services, TV subscriptions and broadband. Therefore, the new basket includes an item that covers any two of these services purchased as a bundle and a separate item covers any three of these services purchased as a bundle.

The latest HBS was carried out between February and February and consisted of a weekly diary of household expenditure and a more detailed survey to capture larger and less frequent purchases. The CPI weights represent the relative importance of the items in the overall CPI basket — the larger the weight the greater the impact that item will have on the overall rate of inflation. The weight is the proportion of total consumer expenditure spent on an item or category of expenditure. Yes, the CPI weights were updated.

Since , the weights of the items in the basket have been updated annually using information on consumer expenditure from National Accounts.