CPI = (the value of a set of fixed goods at current prices divided by the value of a set of fixed goods at base period prices) x 100%
The CPI is the Consumer Price Index, which indicates that, for the average household's expenditures, the purchase of a representative set of goods would cost more today than it would have in the past at a given time.
Example:
For example, if you purchased item A (which is generally a representative set of goods, such as meat, eggs, vegetables, and fruits) on a certain day in 2000 for 100 yuan, and the cost of purchasing item A in 2010 was 110 yuan,
Taking the year 2000 as the base period, the CPI for the base period is 110 yuan. The year 2000 is the base period, which means the "base date", and all years outside of that year are standardized to that year.
CPI in 2000 = (100/ 100)*100% = 100%; CPI in 2010 = (110/ 100)*100% = 110%, which means that if you buy the same thing in 2010, it costs you 10% more than it did in 2000 (this 10% is 10% of the 2000 price).
Inflation rate in 2010 = ((CPI in 2010 - CPI in 2000) / CPI in 2000) * 100% = 10%
CPI is short for consumer price index. Consumer price index is a macroeconomic indicator that reflects changes in the price level of consumer goods and services generally purchased by households. It is a relative measure of the change in the price level of a representative set of consumer goods and services over time in a given period of time, and is used to reflect the change in the price level of consumer goods and services purchased by households.
Consumer price statistics survey is the final price of social products and services, on the one hand, closely related to the people's lives, but also has an important position in the price system of the national economy. It is an important indicator for economic analysis and decision-making, price level monitoring and regulation and national economic accounting. Its rate of change reflects, to a certain extent, the degree of inflation or contraction. Generally speaking, prices across the board, changes in contrast, a sustained rise is considered to have occurred inflation.
Expanded Information
I. The Concept of CPI
CPI is the abbreviation of consumer price index (consumer price index). The consumer price index is a macroeconomic indicator that reflects changes in the price level of consumer goods and services generally purchased by households. It is a relative measure of the change in the price level of a representative set of consumer goods and services over time in a given period of time, and is used to reflect the change in the price level of consumer goods and services purchased by households.
Consumer price statistics survey is the final price of social products and services, on the one hand, closely related to the people's lives, but also has an important position in the price system of the national economy. It is an important indicator for economic analysis and decision-making, price level monitoring and regulation and national economic accounting. Its rate of change reflects, to a certain extent, the degree of inflation or contraction. Generally speaking, prices across the board, changes in contrast, a sustained rise is considered to have occurred inflation.
Two, the basic function
1, measure inflation (deflation). CPI is an important indicator of inflation. Inflation is a general and sustained increase in the price level. the CPI can indicate the severity of inflation at a certain level;
2, national economic accounting. In national economic accounting, a variety of price indices are needed. Such as the consumer price index (CPI), producer price index (PPI) and the GDP deflator, accounting for GDP, so as to remove the impact of price factors.
3. Contractual indexing adjustments. For example, in salary and compensation negotiations, because employees hope that salary (nominal) growth can be equal to or higher than the CPI, and hope that nominal salary will be automatically adjusted in line with the rise in the CPI. The timing of the adjustment is usually after inflation occurs, and the magnitude is lower than the actual inflation rate.
4. Reflecting changes in the purchasing power of money: The purchasing power of money refers to the amount of consumer goods and services that can be purchased per unit of money. Consumer price index rose, the purchasing power of money is down; the opposite is up. The inverse of the consumer price index is the purchasing power of money index.
5. Reflecting the impact on workers' real wages: an increase in the CPI means a decrease in real wages, and a decrease in the CPI means an increase in real wages. Therefore, the consumer price index can be used to convert nominal wages into real wages.
6. Impact of CPI on the stock market: In general, when prices rise, stock prices rise; when prices fall, stock prices fall.
Three, statistical methodology
Provincial (autonomous regions and municipalities) survey headquarters to be sampled in the local survey of cities and counties and price survey points. At present, the total number of samples in the survey area in China **** more than 550 cities and counties, price collection point samples nearly 30,000, nearly 4,000 professionally trained price collectors engaged in price collection.
The first step is to survey cities and counties independently selected price survey points.
These cities and counties to determine the price survey stores, farmers markets and service outlets (statistical terminology called survey points), the survey points are determined as follows: first, all survey outlets were marked by retail sales and scale of operation, from high to low queue; then, based on the number of survey points required for equidistant sampling, and the combination of the size of the principle of balance and reasonable distribution of the sampling.
The second step, price collection.
Provinces (autonomous regions and municipalities) have fixed price surveyors and temporary surveyors in accordance with the unified provisions of the price collection work. After the investigation point is determined, the cities and counties price surveyors will be in accordance with the specified time on the selected stores, markets and service outlets of goods or services prices, using the "three" principle of collection and investigation of registration, "three" principle that is, the fixed point, fixed time, fixed person Direct price collection. Fixed point, that is, to the selected survey point, that is, a fixed survey of stores and farmers' markets, in order to protect the stability and comparability of the source of price information. Timing, that is, in a fixed day and time to collect prices, which is to ensure that the base period price and the reporting period price is comparable in time, because the collection of prices at different times, the price of commodities there are differences. This is most evident in fresh commodities, such as fresh vegetables, usually higher in the morning when they are first listed, and lower in the evening when the market closes. Therefore, when conducting price surveys, not only the number of surveys per month and the date should be consistent, the time of each survey should also be relatively fixed. Fixed, that is, in a certain period of time by a fixed investigator to investigate, this is in order to avoid frequent changes due to the investigator caused by human error in price surveys, to maintain the stability of price information, continuity and comparability. At the same time everywhere also often use the price collection point of the computer management system as an auxiliary survey tool.
The actual price collection also has the following principles: the price of the same specifications must be homogeneous and comparable, that is, the nature of the product is basically the same can be compared; if the listed price of commodities and the actual transaction price is inconsistent, should be investigated to collect the actual transaction price; for the residents closely related to the life of the commodities, the price of the more frequent changes in commodities (such as fresh vegetables, fresh fruits and other fresh food), at least every 5 days to investigate a Price; general commodities monthly survey to collect 2-3 times the price. The third step, data reporting. The survey cities and counties will report the surveyed price information to the provincial (regional and municipal) survey headquarters through the network every month, and the data will be reported to the National Bureau of Statistics by the survey headquarters in the stipulated time after review.
References
Baidu Encyclopedia--CPI