<Tr> <Td> </Td> <Td> This article may be too technical for most readers to understand . Please help improve it to make it understandable to non-experts, without removing the technical details . (March 2013) (Learn how and when to remove this template message) </Td> </Tr> <P> A consumer price index (CPI) measures changes in the price level of market basket of consumer goods and services purchased by households . </P> <P> The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically . Sub-indices and sub-sub - indices are computed for different categories and sub-categories of goods and services, being combined to produce the overall index with weights reflecting their shares in the total of the consumer expenditures covered by the index . It is one of several price indices calculated by most national statistical agencies . The annual percentage change in a CPI is used as a measure of inflation . A CPI can be used to index (i.e., adjust for the effect of inflation) the real value of wages, salaries, pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values . In most countries, the CPI, along with the population census, is one of the most closely watched national economic statistics . </P> <P> Basic types of data that are needed to construct the CPI: price data and weighting data . The price data are collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times . The weighting data are estimates of the shares of the different types of expenditure in the total expenditure covered by the index . These weights are usually based upon expenditure data obtained from expenditure surveys for a sample of households or upon estimates of the composition of consumption expenditure in the National Income and Product Accounts . Although some of the sampling of items for price collection is done using a sampling frame and probabilistic sampling methods, many items and outlets are chosen in a commonsense way (purposive sampling) that does not permit estimation of confidence intervals . Therefore, the sampling variance cannot be calculated . In any case, a single estimate is required in most of the purposes for which the index is used . </P>

The percentage change in the cpi can be used to measure