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Abstract:
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The Consumer Price Index (CPI) estimates the change in prices over time of the goods and services U.S. consumers buy for day-to-day living based on price quotes selected from probability samples. In a three stage study, we determine which item strata in the CPI are affected by product downsizing, upsizing and product churn and whether the CPI accounts for these changes in its indexes. In the first stage, we calculate superlative and geomeans price indexes from Nielsen Scantrack data; initially making no changes to the Nielsen data; and then from edited data, which incorporate product downsizing, upsizing, and churn. In the second stage, we determine which 12-month percent changes derived from the unedited Nielsen data are significantly different from the 12-month percent changes obtained from the amended Nielsen data. In the final stage, we compare the CPI's 12-month percent changes at the all U.S. level for the item strata identified in the second stage of the study as being significantly affected by product downsizing, upsizing and churn to the 12-month percent changes calculated from the edited Nielsen data.
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