II Resolution concerning consumer price indices

Recalling the resolution adopted by the Fourteenth International Conference of Labour Statisticians concerning consumer price indices and recognizing the continuing validity of the basic principles recommended therein and, in particular, the fact that the consumer price index (CPI) is designed primarily to measure the changes over time in the general level of prices of goods and services that a reference population acquires, uses or pays for, Recognizing the need to modify and broaden the existing standards in the light of recent methodological and computational developments to enhance the usefulness of the international standards in the provision of technical guidelines to all countries, Recognizing the usefulness of such standards in enhancing the international comparability of the statistics, Recognizing that the CPI is used for a wide variety of purposes and that governments should be encouraged to identify the (priority) purposes a CPI is to serve, to provide adequate resources for its compilation, and to guarantee the professional independence of its compilers, Recognizing that the (priority) objectives and uses of CPI differ among countries and that, therefore, a single standard could not be applied universally, Recognizing that the CPI needs to be credible to observers and users, both national and international, and that better understanding of the principles and procedures used to compile the index will enhance the users' confidence in the index, Agrees that the principles and methods used in constructing a CPI should be based on the guidelines and methods that are generally accepted as constituting good statistical practices; Adopts, this third day of December 2003, the following resolution which replaces the previous one adopted in 1987: The nature and meaning of a consumer price index 1. The CPI is a current social and economic indicator that is constructed to measure changes over time in the general level of prices of consumer goods and services that households acquire, use or pay for consumption. 2. The index aims to measure the change in consumer prices over time. This may be done by measuring the cost of purchasing a fixed basket of consumer goods and services of constant quality and similar characteristics, with the products in the basket being selected to be representative of households' expenditure during a year or other specified period. Such an index is called a fixed-basket price index. 3. The index may also aim to measure the effects of price changes on the cost of achieving a constant …