## Consumer Price Index Manual: Concepts and Methods — Summary of Changes

## Source details

**Canonical URL:** [Consumer Price Index Manual: Concepts and Methods — Summary of Changes](https://www.imf.org/-/media/files/data/cpi/2019/overview-of-updated-cpi-manual.pdf)

## Other formats

- [Markdown version](/-/media/files/data/cpi/2019/overview-of-updated-cpi-manual.pdf.md)
- [Structured JSON version](/-/media/files/data/cpi/2019/overview-of-updated-cpi-manual.pdf.json)

---

### General updates and objectives
- Manual is more prescriptive: provides first-best recommendations and presents second- and third-best options to guide compilers.
- Reflects advances in technology, e-commerce, and the digital economy, addressing conceptual changes needed to measure new goods and services.
- Reflects improvements in CPI concepts and methods and evolving data user needs.
- Ensures broader consistency with the 2008 System of National Accounts (2008 SNA).
- Eliminates repetition and ensures consistency between chapters.
- Practical Guide to Compiling Consumer Price Indices has been incorporated into the Manual; the CPI Guide will be replaced by the Manual and discontinued.
- Each chapter now concludes with a summary of key points and identifies key recommendations.
- Terminology standardized:
  - Product: goods and services that result from a process of production.
  - Item: an individual good or service selected to represent a sampled product; in the aggregation structure, the item level refers to the lowest level where an expenditure weight is available.
  - Variety: the individual observation for which prices are collected during the collection period; includes the detailed specification of the product (structured product description, SPD); varieties are sampled to represent items.
- Elementary aggregate redefined as the first level with expenditure weights to ensure consistency when using alternative sources such as scanner data.

### Chapter 1 — Introduction, overview, and basic steps for CPI development
- Chapter redrafted to follow steps needed to develop and maintain a CPI that meets Manual standards.
- Recommendations from other chapters summarized in each section.
- Chapter intended to serve as a stand-alone resource providing a broad overview of key concepts and recommendations for compiling a CPI.

### Chapter 2 — Uses, concepts, scope, and classifications of CPI
- Two previous chapters combined and streamlined; updated to reflect e-commerce and digitalization.
- Key updates:
  - Uses of CPI: expanded discussion on deflation of national accounts, CPI as macroeconomic indicator, CPI as key input into monetary policy, enhanced discussion of core inflation, and importance of collaboration between central banks and CPI compilers.
  - Concepts: alignment with 2008 SNA; different definitions of consumption presented; updated treatment of internet purchases, monetary and non-monetary expenditure, and different CPI types depending on use.
  - Coverage: streamlined into four sections (coverage of households; coverage of household expenditure on goods and services; coverage of price collection; coverage of outlets); clarified household coverage and need for broad coverage; elaborated treatment of subsidized prices, own-account production, discounts, sales; expanded outlet coverage to include internet outlets.
  - Classifications: new summary of changes adopted in the Classification of Individual Consumption According to Purpose (COICOP 2018).

### Chapter 3 — Expenditure weights and their sources
- Key updates:
  - Concepts: summary of conceptual issues and application in practice (domestic vs national concepts; own-account production and in-kind remuneration; owner-occupied housing; business expenditure; social transfers in kind; taxes and subsidies; institutional households).
  - Elementary aggregates: defined as lowest level with expenditure weight; need for detailed weighting structure; use of alternative data sources to develop weights; actual elementary aggregate level may differ across countries.
  - Regional weights: expanded strategies for regional weighting; preferred approach is estimating regional expenditure and aggregating to national weights; more detail on urban and rural weights; avoid using population to develop CPI weights.
  - Data sources: emphasis on collaboration between CPI, national accounts, and household expenditure survey staff; expanded discussion on using national accounts for upper-level weights; new section on other sources (scanner data; retail sales data; point of purchase surveys; cross-border shopping surveys).
  - Deriving weights in practice: incorporates Practical Guide advice; commodity flow approach discussed to account for over- and under-reporting.
  - Weight reference period: stronger recommendation that weight reference period should be a minimum of 12, consecutive months.
  - Frequency: emphasize reducing lag between weight and price reference period; recommendation that weights be updated at least every five years; advantages of more frequent updates emphasized.
  - Special issues: includes developing weights for owner-occupied housing.

### Chapter 4 — Sampling
- Chapter rewritten to reflect multistage sampling for geographic areas, items, outlets, and varieties.
- Key updates:
  - Sample design: probability sampling preferred; guidance on maximizing representativity when probability sampling is not feasible.
  - Optimal sample allocation: practical approaches linking price collection allocation to elementary aggregate weights; allocate based on price variation; introduce a minimum threshold of the number of prices collected for each elementary aggregate: 8-10 prices to avoid estimation bias when samples are too small.
  - Greater emphasis on practical methods to select and maintain samples.

### Chapter 5 — Price collection and validation
- Significant updates reflecting e-commerce, digitalization, and evolving price collection methods.
- Key updates:
  - More operational and practical focus; incorporation of Practical Guide material.
  - New section on internet shopping and online price collection.
  - Appendix on web scraping drawing on country experiences; details on using web scraping in monthly CPI production and its fit with current methods.
  - Section on using handheld tablets/devices for price collection.
  - Expanded discussion of fieldwork operations, management, and organization.
  - Expanded discussion of defining a transaction price, including unit values from scanner data, bargained prices, discounts, and sales.
  - New sections on quality management, documentation, and methods/tools for price validation.

### Chapter 6 — Temporarily and permanently missing prices and quality adjustment
- Chapter reorganized and retitled to emphasize treatment sequence: temporarily missing prices first, then permanently missing prices and quality adjustment methods.
- Key updates:
  - Matched models method (MMM) discussed as facilitating measurement of a constant quality price index; emphasizes relation between matching failures and missing prices.
  - Greater emphasis on role of data collectors and CPI staff in treatment of missing prices and quality adjustments.
  - More detail on implicit and explicit quality adjustment methods with illustrative examples.
  - Expanded discussion on permanently missing items due to high model turnover and alternative treatment methods with pros and cons.
  - New section on metadata for imputation and quality adjustment methods.
  - New discussion on quality assurance to ensure consistent treatment of missing prices and quality adjustment methods.

### Chapter 7 — Maintaining the sample
- Chapter reorganized and streamlined to reduce duplication.
- Key updates:
  - Terminology standardized: “New goods” includes new goods and services.
  - Expanded discussion of revolutionary and evolutionary new goods and outlets.
  - Enhanced strategies for maintaining samples, especially where updates/revisions are infrequent.

### Chapter 8 — Calculating consumer price indices in practice
- Many sections rewritten to be more prescriptive.
- Key updates:
  - Recommendation to avoid using the Carli index; elementary indices section explains preference for Jevons and Dutot over Carli.
  - New section on Jevons and Dutot clarifies strengths, weaknesses, and definition of homogeneity.
  - Enhanced section on missing prices with clearer preferred imputation methods and discussion of handling “zero” prices.
  - New section on compiling regional indices.
  - Higher-level indices: detailed discussion on Modified Laspeyres versus the long-term relative formula; advantages of the Modified Laspeyres presented in detail.

### Chapter 9 — Updating CPI weights and linking new to previous CPI series
- New chapter providing guidance on deriving new weights and introducing them.
- Key points:
  - Describes price-updating weights procedure and alternative approach of directly using new weights assuming stable expenditure shares.
  - Guidance on applicability, pros and cons of price updating.
  - Detailed methods for updating weights.
  - Methods for linking new CPI to existing CPI to create a continuous time series are discussed and demonstrated.

### Chapter 10 — Scanner data
- New chapter on opportunities and challenges of using scanner data for CPI compilation.
- Key content:
  - Practical considerations for acquisition, assessment, and preparation of scanner datasets.
  - Implementation issues and new multilateral methods developed to construct price indices from scanner data.
  - Discussion on assessment of new methods, empirical results, communication with users and stakeholders, and publication and dissemination of ‘new’ price indices.

### Chapter 11 — Selected special cases
- Updated to reflect e-commerce, digitalization, and challenging product treatments; incorporates Practical Guide material.
- Key updates:
  - Seasonal products: removed variable weights as an option; preferred approaches and practical advice for seasonal clothing provided.
  - Housing: updated to include rent surveys and owner-occupied housing; all possible approaches to owner-occupied housing are outlined; no consensus on a preferred approach.
  - Own-account production: practical measurement focus; distinguishes goods produced for own consumption from owner-occupied housing services; practical guidance on preferred approaches.
  - Tariffs: expanded discussion of compiler challenges (complex pricing schedules; bundled packages; long-term contracts; substitution across providers; substitution across tariffs from same provider; quality differences); illustrative examples of matched sample, unit value, and customer profile approaches.
  - Second-hand goods: updated alignment with 2008 SNA and practical guidance on developing net weights.

### Chapter 12 — Errors and bias in the CPI
- Updated for consistency with other chapters and to reflect more current references.

### Chapter 13 — Data quality management and reporting
- Renamed and updated to focus on quality management processes for CPI production and dissemination; incorporates international best practice and Practical Guide examples.
- Key updates:
  - More detailed and practical advice on data quality management and reporting.
  - Illustrative examples on price editing.
  - Expanded discussion on detailed metadata and data quality reporting.
  - Presents the IMF’s Data Quality Assessment Framework (DQAF) as a structure for assessing existing practices against best practices and provides a detailed summary of DQAF use in data quality management.

### Chapter 14 — Publication, dissemination, and user relations
- Updated to reflect evolving dissemination methods and data user needs; minimal updating needed.
- Key updates:
  - Discusses growing trend of electronic data dissemination.
  - Recommends dissemination of detailed indices on NSO websites down to the elementary aggregate level.
  - Recommends dissemination of detailed weight data on NSO websites (down to elementary aggregate level).
  - Recommends dissemination of detailed regional data in addition to national data (down to elementary aggregate level).

---


_Source: https://www.imf.org/-/media/files/data/cpi/2019/overview-of-updated-cpi-manual.pdf_