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CPI - Consumer Prices index

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CPI is the abbreviation of Consumer Prices index It is an index in which the prices of a set of products (known as "basket" or "basket") determined on the basis of the continuous household budgets survey (also called the survey of household spending), a number of consumers acquired so regular, and variation are checked with the price of each, with respect to a previous sample. In this way is intended to measure, monthly, the evolution of the level of prices of goods and services consumption in a country

CPI All must be: Representative (to cover the largest possible population) Comparable (both temporarily as spatially, i.e., with other CPI from other countries) Reliable Precise Consistent (with other statistics from the same country and with the CPI of other countries in the region) Useful Timely (that its publication date is the earliest possible). When you design, guidelines are established in such a way that any decision adopted in setting up the sample and methodological content should go to achieve his goal. This analysis is used in economics to determine whether the economy of a given country will go in the process of inflation (rising prices) or deflation (falling prices), and to what degree. The base period is the one for which the arithmetic mean of monthly index is equal to 100. The year 2001 is the basis of the new system in force in the European Union: This implies that all indexes that are calculating subsequently will be referred to this year.

Objectives of the CPI: The objective is to measure the evolution of the prices of goods and services representative of households in a region consumption expenditure. Applications that are usually you give are: -          Indicator of inflation (knowing that the CPI does not include prices of intermediate consumption of enterprises or of exported goods). -          Deflator of national accounts or national accounts and other statistics -          Update of debts or legal amounts. -          Estimate of the cost of living (knowing that the CPI is not an index of cost of living for having differences with him).

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