Onimissi M. Sheidu " Description of the Revised Commodities and Services Optimal Sample Design"

The Bureau of Labor Statistics (BLS) is responsible for designing and compiling the Consumer Price Index (CPI). The CPI is made up of two large components Commodities and Services (C&S), which is about 72.5%, and Housing, roughly 27.5%. Twice a year BLS conducts sample rotation for the commodities and services component of the CPI in order to introduce new items into the sample and to select a set of outlets that better reflects current expenditures among outlets. For each rotation the sample of items and outlets are allocated in optimal fashion. This item-outlet optimization requires the estimation of variance and cost components and is modeled such that a sample design can be found that minimizes the sampling variance of the estimator. Recently, there have been updates and revisions to the commodities and services optimal sample design procedures. This paper describes and documents the revised commodities and services optimal sample design.