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Revising Replicate Selection in the CPI Variance System

Owen J. Shoemaker and Fred Marsh


The Consumer Price Index (CPI) program at the Bureau of Labor Statistics (BLS) is actively considering streamlining its CPI Estimation System to produce a more efficient and more flexible overall operation. This New Estimation System will entail the elimination of the replicate structure, which currently provides the necessary replicate values for the CPI's Stratified Random Group (SRG) Variance System. In order for BLS to continue using its SRG methodology, it will become necessary to create these needed replicates "dynamically" (by random assignment) each month from full sample values. In this paper, we will investigate and compare as well as produce the results from the use of dynamically constructed replicate price changes and compare these variance results with the currently computed CPI variances. At least two random methodologies for selecting the replicate values will be analyzed.