Economics Consumer Price Index Cpi Questions
The CPI accounts for quality changes in goods and services through a process called quality adjustment. This involves adjusting the price of a product or service to reflect changes in its quality over time. The Bureau of Labor Statistics (BLS) uses various methods to measure and quantify these quality changes, such as hedonic regression analysis and direct price comparisons. By incorporating quality adjustments, the CPI aims to provide a more accurate measure of inflation and changes in the cost of living.