Mathematics Paper Analysis Consumer Price Index

Consumer Price Index
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The Consumer Price Index (CPI) indicates the spending habits for two distinct populations, that is the urban consumers and wage earners, and the clerical workers. The CPI is referred to as cost of living index, however, it is different in significant ways. The U.S Bureau of Statistics (BLS) has been using the cost of living as an objective measure of CPI. Besides, it has been informing decision making regarding questions which come up as a result of CPI development. As much as the cost of living index is a conceptual measurement goal, it is not a clear option for the CPI. The cost of living would estimate over a particular period the differences in the quantity that consumers require to use to attain a particular standard of living or rather a particular level of utility.
The cost of living index and CPI indicates the alterations in the prices of comodities and services like health care and food, which are bought directly from the producers. However, a complete cost of living would supercede this function to consider the alterations in both the environmental and governmental factors which influence the consumer’s health. It is hard to establish the levels of treatment of public goods like education and safety. So is the case for public goods of wide interests like the quality of water, health care, and even crime. Obviously, these public goods make up a complete cost of living framework. Previously, the CPI was regarded bound on cost of living index with the assumption that the CPI did not indicate the alterations in the consumption habits or even the buying habits which the consumer would make to fit to the respective changes in prices.
The world of comodities and services is made up of comodities and services which can be linked to a retail price. Hence, they can be linked to certain quality and quantity. The public goods and services offerred by the government and those that lack market price are not included because they cannot be linked with a retail price. Services like health care which are basically obtained through health insurance are not included. Similarly, life disability insurance premiums are excluded. Although goods and services bought by the general population are included. For instance, medical supplies and drugs. These comodities and services can be as well linked to a retail price.
During the determination of the world of goods and services for the CPI, no energy is chanelled towards isolating comodities and services considered as either “luxurious” or “essentials.” Besides, neither is ommited on moral basis. For example, some may see a vehicle and alcohol use as undesirable. However, they are both added up to the product world of CPI since they represent a legitimate a...