|
Abstract:
|
The U.S. Bureau of Labor Statistics Consumer Price Index (CPI) program revises fixed quantity weights for products such as the CPI-U, CPI-W, and preliminary C-CPI-U on a biennial basis- each January of even years. The current biennial weight reference period lags from 2-3 years until first use for even index years, and from 3-4 years for odd index years. Reducing this lag via annual revisions improves the timeliness of the fixed quantity weights for index estimation due to the representativeness of household expenditures from a more recent reference period of the Consumer Expenditure Survey. Additionally, annual revisions create a consistent lag across index years, in contrast to the current biennial revision process. Historically, biennial weight revisions were justified in terms of a sufficient sample from the biennial period, and effectively mitigating risk of chain drift. The ensuing analysis will demonstrate that the elementary item-area cell coverage of post-processed annual weights is adequate, and that annual weight revisions pose no appreciable risk of chain drift.
|
