Simulated Statistics for the Proposed By‐Division Design In the Consumer Price Index

John F. Schlip

Abstract

This paper illustrates the research done in determining if by-Census Division stratification will give results similar to the existing Census Region city-size stratification results in the Consumer Price Index (CPI). Motivating this project is the proposed CPI switch from region city-size stratification to by-division stratification. Simulated by-division indexes for all Census Regions, as well as the non-self-representing part of the all U.S. CPI were completed by adjusting existing weights with respect to Census Division population share. In turn, these index time series are compared to hybrid by Census Region city-size index time series for the same areas and time period. A conclusion is given with comparison of results for CPI time series, 12-month percent changes and standard errors for the 12-month percent changes.