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Thread: What is the true rate of price increases? Chapwood Index

  1. #1
    Senior Member
    Join Date
    Dec 2010
    Price County, WI

    What is the true rate of price increases? Chapwood Index

    The Consumer Price Index, as calculated by the U S Bureau of Labor Statistics over the years 2014 - 2018:
    2014 0.8%
    2015 0.7%
    2016 2.1%
    2017 2.1%
    2018 1.9%

    The prices of individual items in the "basket" are regularly adjusted for quality. Theoretically, if the rent on a 2 bedroom apartment is increased by 5% per year, and the quality of apartment living also improved by 5%, then the increase is zero, for purposes of calculating the CPI.

    The Chapwood Index is based on the UNADJUSTED actual cost of the top 500 items on which Americans spend their money (or charge their credit cards for), in the 50 largest cities. Over the same 2014-2018 time period, prices increased quite a bit more than the CPI rates. Of the 50 largest American cities, Mesa AZ had an average annual increase of 6.6%
    The city with the most rapid rate of increase was San Jose CA with a 13% average annual increase.

    All 50 of the largest cities were in the 6.6% to 13% range.

  2. #2
    Senior Member razz's Avatar
    Join Date
    Dec 2010
    Ontario, Canada
    The CPI has been adjusted significantly over the years. I remember when the food portion included roast beef which was later adjusted to ground beef then chicken in one year's report. I see it more as manipulation of the facts over time.
    The gas price really impacted when it soared and then fell. So much depends on the CPI for deciding on rate of increase in cost of living for pension. etc., increases.
    I did read an article some time ago on the reasons for the difference of CPI vs actual cost based on the same basket over the year. Something about a TV which cost $1000 has fallen to about $300 as technology develops.
    It also fails to consider the difference between an average of $2000/ month rent and the fact that so little is available at all. I often wonder who is the average shopper.

    Gandhi: Happiness is when what you think, what you say and what you do are in harmony .

  3. #3
    Senior Member iris lilies's Avatar
    Join Date
    Mar 2013
    The Chapwood index showed several cities where CPI went down. Louisville, Denver, etc. That was interesting.

  4. #4
    Senior Member Rogar's Avatar
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    Jan 2011
    I've always thought the CPI was especially bogus. Housing costs here have increased 10 or more percent a year for the past few years as have corresponding taxes. Health care/ insurance has probably gone up similarly. It seems like those are significant portions of a person's spendable income. It's probably not worth much complaining as I've not heard of any reasonable expectations that it might change.

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