The consumer price index (CPI) providesa broad measure of the cost of living inCanada. While there are other ways tomeasure price changes, the CPI is the mostimportant indicator because of itswidespread use, for example, to calculatechanges in government payments such as theCanada Pension Plan and Old Age Security. Through the monthly CPI, Statistics Canadatracks the retail price of a CPI shoppingbasket made up of about 600 goods andservices from the general categories of anaverage household’s expenditure - food,shelter, furniture, clothing, transportation, and recreation. The percentage of the total basket that anyitem occupies is termed the “weight” andreflects typical consumer spending patterns.Since people tend to spend more on foodthan clothing, changes in the price of food have a bigger impact on the index than, forexample, changes in the price of clothing andfootwear. Calculating the CPIPrices are measured against a base year. Thebase year is currently 1992 and the basket forthat year is given the value of 100. In 1997,
This is the end of the preview.
access the rest of the document.