Consumer Price Index (CPI)
If you are Diligent to hear or see the Economic News, you may need to read up on the price index. Known capital market composite stock price index, known in the trade of the wholesale trade price index, and the measurement of inflation known consumer price index. Discussed in this section a useful index to measure price inflation, the consumer price index (CPI) or the "Consumer Price Index" (CPI).
The Inflation rate usually calculated from the percentage change in CPI over a period of time. Understanding the consumer price index is a measure of the average change in prices of a commodity packages (Commodity Basket) in a certain period of time or over time. CPI describes the changes in general of a number (Packet) commodity consumption in urban households. Packages of commodities used in compiling the CPI obtained from the household expenditure survey is usually called the cost of living survey (SBH). According to Central Bureau of Statistics, the price index numbers are numbers that show the comparison of prices in two different times so that the price index number is defined as the number of comparisons between the prices of commodities or kelompokkomoditas which occurred in a period of time with a predetermined period of time. Because the price data used is the price the consumer price index used is the consumer price index.
CPI calculation purposes are as follows:
- Knowing the price development of goods and services incorporated in the CPI scale diagram
- As a guideline to determine a policy that will come, especially in the field of economic development.
- For calculating the minimum wage adjustment counties (SMEs)
- Supply and demand facilitate the monitoring needs of the particular goods in the market.
To Calculate the CPI need to know first the prices of which are preferably used. The consumer price index covers the prices of commodities commonly purchased household. Changes in the CPI is intended to measure changes in household living expenses. In addition, the prices of different commodities are usually changed with different proportions, so keep in mind how important changes in the price of a commodity, such as changes in the price of rice was more important than price changes in bird nests turtledove. Thus in calculating the CPI each commodity is weighted to reflect the relative importance of these commodities.
Government through the central statistical agency regularly conducts a survey of a group of so-called household survey of consumer spending. The result will show how consumers spend penghasilannya.untuk give weight to, a group of consumer goods purchased bias determined in advance, and then the proportion of income spent for each item. The proportion is used as the weight on each price in determining the CPI. As a result, the CPI gives a high weighting in commodity prices which consumers spend less income.