· The Consumer Price Index is a measure of the inflation as experienced by people in their day-to-day life. It is a measure related to the consumer’s daily expenses. Consumer Price Index is also referred to as the cost of living index. In real terms, CPI or Consumer Price Index is the measure of the average price by which a consumer buys the household things/5(6). CPI vs DPI: Different, Yet Similar While most people are confused in the comparison of CPI vs DPI in mice, chances are that in the scenario where you’re using it, they both refer to the same thing. Technically though, CPI is supposed to be the correct nomenclature for mouse sensitivity.
I am glad that I could be of some help to you. Let me know if you need any further help. A project team with a CPI of 0. Which of the following would be the BEST option to do so? Reduce a test cycle in the system testing phase b. Reduce scope by cutting down non-essential features c. Add more resources to expedite the schedule d.
Revisit estimates and eliminate risks and then re-estimate. Your email address will not be published. This site uses Akismet to reduce spam. Learn how your comment data is processed. Here are the links for these blog posts: Therefore, ensure that non-critical activities are included.
Moreover, to get the efficiency, you need indexes. Comments Quick question on this scenario: It is the end of the project already and SPI is 0. Which is the best answer? It suggests the project was terminated before completion. At completion the SPI is always marked as 1 irrespective of when the work was completed. You found the following earned value analysis information for a project that was recently closed-out: You are behind the schedule and on budget.
The data shows you are ahead of schedule and over budget. What are the other options? Correct answer is A. This was the answer I was looking out for!! I have a question. Hello Lauren, I am glad that I could be of some help to you. The statistical sources required for regional and outlet-type breakdowns are usually weak. Only a large-sample Household Expenditure survey can provide a regional breakdown.
Regional population data are sometimes used for this purpose, but need adjustment to allow for regional differences in living standards and consumption patterns. Statistics of retail sales and market research reports can provide information for estimating outlet-type breakdowns, but the classifications they use rarely correspond to COICOP categories.
The increasingly widespread use of bar codes, scanners in shops has meant that detailed cash register printed receipts are provided by shops for an increasing share of retail purchases. This development makes possible improved Household Expenditure surveys, as Statistics Iceland has demonstrated. Survey respondents keeping a diary of their purchases need to record only the total of purchases when itemised receipts were given to them and keep these receipts in a special pocket in the diary.
These receipts provide not only a detailed breakdown of purchases but also the name of the outlet. Thus response burden is markedly reduced, accuracy is increased, product description is more specific and point of purchase data are obtained, facilitating the estimation of outlet-type weights.
There are only two general principles for the estimation of weights: Ideally, in computing an index, the weights would represent current annual expenditure patterns. In practice they necessarily reflect past using the most recent data available or, if they are not of high quality, some average of the data for more than one previous year. Some countries have used a three-year average in recognition of the fact that household survey estimates are of poor quality.
In some cases some of the data sources used may not be available annually, in which case some of the weights for lower level aggregates within higher level aggregates are based on older data than the higher level weights. Infrequent reweighing saves costs for the national statistical office but delays the introduction into the index of new types of expenditure.
For example, subscriptions for Internet service entered index compilation with a considerable time lag in some countries, and account could be taken of digital camera prices between re-weightings only by including some digital cameras in the same elementary aggregate as film cameras.
The way in which owner-occupied dwellings should be dealt with in a consumer price index has been, and remains, a subject of heated controversy in many countries. Various s have been considered, each with their advantages and disadvantages. Leaving aside the quality of public services, the environment, crime and so forth, and regarding the standard of living as a function of the level and composition of individuals' consumption, this standard depends upon the amount and range of goods and services they consume.
These include the service provided by rented accommodation, which can readily be priced, and the similar services yielded by a flat or house owned by the consumer who occupies it. Its cost to a consumer is, according to the economic way of thinking, an "opportunity cost", namely what he or she sacrifices by living in it. This cost, according to many economists, is what should form a component of a consumer price index.
Opportunity cost can be looked at in two ways, since there are two alternatives to continuing to live in an owner-occupied dwelling. One — supposing that it is one year's cost that is to be considered — is to sell it, earn interest on the owner's capital thus released, and buy it back a year later, making an allowance for its physical depreciation.
This can be called the "alternative cost" approach. The other, the "rental equivalent" approach, is to let it to someone else for the year, in which case the cost is the rent that could be obtained for it. There are, of course, practical problems in implementing either of these economists' approaches. Thus, with the alternative cost approach, if house prices are rising fast the cost can be negative and then become sharply positive once house prices start to fall, so such an index would be very volatile.
On the other hand, with the rental equivalent approach, there may be difficulty in estimating the movement of rental values of types of property which are not actually rented. If one or other of these measures of the consumption of the services of owner-occupied dwellings is included in consumption, then it must be included in income too, for income equals consumption plus saving.
This means that if the movement of incomes is to be compared with the movement of the consumer price index, incomes must be expressed as money income plus this imaginary consumption value. That is logical, but it may not be what users of the index want. Although the argument has been expressed in connection with owner-occupied dwellings, the logic applies equally to all durable consumer goods and services.
Furniture, carpets and domestic appliances are not used up soon after purchase in the way that food is. Like dwellings, they yield a consumption service that can continue for years. Furthermore, since strict logic is to be adhered to, there are durable services as well that ought to be treated in the same way; the service consumers derive from appendectomies or crowned teeth continue for a long time.
Since estimating values for these components of consumption has not been tackled, the economic theorists are torn between their desire for intellectual consistency and their recognition that inclusion of the opportunity cost of the use of durables is impracticable.
Another approach is to concentrate on spending. This turns out to be quite complicated, conceptually as well as in practice.
To explain what is involved, consider a consumer price index computed with reference to for just one sole consumer who bought her house in , financing half of this sum by raising a mortgage.
The problem is to compare how much interest such a consumer would now be paying with the interest that was paid in It does not require an estimate of how much that identical person is paying now on the actual house she bought in , even though that is what personally concerns her now. A consumer price index compares how much it would cost now to do exactly what consumers did in the reference-period with what it cost then. Application of the principle thus requires that the index for our one house owner should reflect the movement of the prices of houses like hers from to and the change in interest rates.
If she took out a fixed-interest rate mortgage it is the change in interest rates from to that counts; if she took out a variable interest mortgage it is the change from to that counts. Thus her current index with as reference-period will stand at more than if house prices or, in the case of a fixed-interest mortgage, interest rates rose between and The application of this principle in the owner-occupied dwellings component of a consumer price index is known as the "debt profile" method.
It means that the current movement of the index will reflect past changes in dwelling prices and interest rates. Some people regard this as odd. Quite a few countries use the debt profile method, but in doing so most of them behave inconsistently. Consistency would require that the index should also cover the interest on consumer credit instead of the whole price paid for the products bought on credit if it covers mortgage interest payments.
Products bought on credit would then be treated in the same way as owner-occupied dwellings. Variants of the debt profile method are employed or have been proposed. One example is to include down payments as well as interest. Another is to correct nominal mortgage rates for changes in dwelling prices or for changes in the rest of the consumer price index to obtain a "real" rate of interest.
Also, other methods may be used alongside the debt profile method. Thus several countries include a purely notional cost of depreciation as an additional index component, applying an arbitrarily estimated, or rather guessed, depreciation rate to the value of the stock of owner-occupied dwellings. This measure helps filter out extreme price movements that might be caused by factors specific to certain components.
In particular, CPI-trim excludes 20 per cent of the weighted monthly price variations at both the bottom and top of the distribution of price changes, and thus it always removes 40 per cent of the total CPI basket. These excluded components can change from month to month, depending on which are extreme at a given time. A good example would be the impact of severe weather on the prices of certain food components.
This approach differs from traditional a priori exclusion-based measures e. CPI-median is a measure of core inflation corresponding to the price change located at the 50th percentile in terms of the CPI basket weights of the distribution of price changes in a given month. This measure helps filter out extreme price movements specific to certain components. This approach is similar to CPI-trim as it eliminates all the weighted monthly price variations at both the bottom and top of the distribution of price changes in any given month, except the price change for the component that is the midpoint of that distribution.
CPI-common is a measure of core inflation that tracks common price changes across categories in the CPI basket. It uses a statistical procedure called a factor model to detect these common variations, which helps filter out price movements that might be caused by factors specific to certain components.
The CPI excluding eight of the most volatile components fruit, vegetables, gasoline, fuel oil, natural gas, mortgage interest, inter-city transportation and tobacco products as well as the effect of changes in indirect taxes on the remaining components.
Revisit estimates and eliminate risks and then re-estimate.
The Social Security trust fund is flush for at least two decades.