Consumer Price Index

Measuring Price Change in the CPI: Computers, peripherals, and smart home assistant devices

The computers, peripherals, and smart home assistant devices index is a subcomponent of the information technology, hardware, and services category of the Consumer Price Index. The CPI tracks changes in prices for items sold to household consumers for personal use. The computers, peripherals, and smart home assistant devices index is published monthly at the U.S. level.

Item definition

The computers, peripherals, and smart home assistant devices index includes all types of personal computers such as tablets, desktop computers, notebook computers, computer hardware, and peripheral equipment sold for noncommercial applications. Peripheral equipment includes, but is not limited to, hard drives, mice, monitors, and printers. Smart home assistants that are speaker or screen based, and any accompanying accessories, are also included in this index.

Relative importance

The relative importance of an item category is its percent of the CPI weight as of December of the most recent year.

Table A. Relative importance, December 2018
Item Relative importance
Information technology, hardware, and services 1.200
  Computers, peripherals, and smart home assistant devices 0.309
  Computer software and accessories 0.024
  Internet services and electronic information providers 0.786
  Telephone hardware, calculators, and consumer information items 0.072
  Unsampled information and information processing 0.009

Sample selection

In order to determine where to collect information on specific categories, including computer, peripherals, and smart home assistant devices, a Telephone Point of Purchase Survey (TPOPS) is conducted by the U.S. Census Bureau. The TPOPS is used to collect data about where consumers purchase goods and services and how much they are spending. The data from the TPOPS are then used to select the retail establishments in which BLS monitors the prices of computers, peripherals, and smart home assistant devices.

Price change and quality adjustment

All price information for computers, peripherals, and smart home assistant devices in the CPI is collected by CPI data collectors, and evaluated for index use by analysts in the Washington Office.

Data collectors return every month to the sampled outlets to obtain the current prices of the selected items, including any changes or discounts. Any characteristics of the selected items that have changed are also identified and reviewed. When the price of an item changes, the CPI analyst tries to determine a reason for the change; however, if the characteristics remain unchanged, the CPI usually reflects the price change without any adjustments.

Price change

If a replacement is needed and it is essentially the same as the predecessor item, the CPI treats any price difference between the replacement item and its predecessor as pure price change. If the characteristics of the item changed and the reported change is one that provides little value to the consumer, the CPI will show the unadjusted price change. This is how an item replacement is typically handled in the CPI to show price change from one month to another.

However, unlike most other item categories in the CPI, computers do not follow these standard item replacement procedures as computer manufacturers are continually releasing new, higher quality models. If item replacement procedures for most other CPI items were followed, the quality of the computers reported for pricing would fall to the lowest level of quality in a short period of time.

Quality adjustment

The quality for personal computers is associated with the attributes of the components that are used to build it. Attributes include the speed of the central processing unit (CPU), the amount of random access memory (RAM), and the hard drive storage capacity. Based on these and other attributes, all personal computers are classified into one of three levels of quality: high end, mainstream, or economy/low-end.

The specific attributes that differentiate each quality level are updated every 6 months. CPI data collectors are instructed to replace (or substitute) an older computer to a new one of the same level of quality but with updated attributes. This process, known as directed substitution, was introduced in January 2000. The directed substitution process is different from the typical CPI process where an item continues to be priced until that item is no longer available in the marketplace. With directed substitution, data collectors are directed to substitute to a new item, regardless of the availability of the previous item. Analysts in the national office then adjust for the quality change in the computer's attributes to reflect price change for the particular level of quality.

Because the individual components in personal computer configurations change so rapidly, the CPI program moved to an approach that uses attribute values available on the Internet as a basis to determine appropriate quality adjustments amounts in 2003. The attribute cost adjustment database for desktops computers has seven attribute categories. Each attribute category is populated with the values of specific components, resulting in a database of 250 to 300 attribute values that are updated monthly.

The monetary values of computer attributes used by the CPI for adjustments are obtained from Original Equipment Manufacturer (OEM) websites. These websites are computer part price aggregators. The data obtained from these OEM websites include the producer prices of computer components, such as the hard drive, CPU, or RAM model, that were charged to the computer manufacturer.

Data

Access data for computers, peripherals, and smart home assistant devices in our online database.

Additional information

Additional information may be obtained from the Consumer Price Index Information Office by email or calling 202-691-7000. Information on the CPI's overall methodology can be found in the BLS Handbook of Methods.

Last Modified Date: July 9, 2019