22
MAR 2016
The Consumer Price Index (CPI) is monthly data released by the Bureau of Labor Statistics on the change in prices paid by urban consumers for a representative basket of goods and services. The CPI is available by region and consumer type. It is most often used to measure inflation, which is an important concern when present-valuing economic damages in the future. Future damages must be discounted by the rate of inflation, because one dollar today is worth more than one dollar tomorrow.
Note: Even though CPIs differ by city, it is not appropriate to use CPI data to compare the cost of living between cities. The CPI does not measure price differentials between cities, but rather only over time. The representative basket of goods and services varies with geographic location.
For information on the Consumer Price Index, please refer to www.bls.gov/cpi
Image source: http://theregister.co.nz/news/2015/08/new-zealands-consumer-price-index-it-accurate-enough