Friday, April 24, 2009

some component of the C.P.I.

Instead of using the C.P.I itself, one could use one of the five component indexes from which it is built up, namely the indexes for food, clothing and drapery,housing, household supplies and equipment,and miscellaneous. However,all of these fall down on the score of comprehensiveness,being worse in this respect,of course,than C.P.I.itself.Also,all are deficient in relation to at least one of the other three requirements. For example,the housing index is deficient in relation to the first requirement - the problem of allowing for improvements in quality is especially acute in relation to a housing price index and is only partially solved in the case of the housing component of C.P.I. Again,the household-supplies index covers most of the commodities which are subject to sales tax,and for this reason does not stand up well in relation to the fourth requirement. The food index is deficient in this respect also,since it covers all of the important raw foods.

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