Toward a Cost-of-Living Index: Progress and Prospects

The author considers the improvements the Bureau of Labor Statistics has made to the Consumer Price Index since the mid 1990s. These include changes designed to make the index more representative of current expenditure patterns; to account for consumer substitution in response to relative price change; and to account for changes in the quality of the goods and services that consumers purchase. Drawing on selected recommendations made by the National Academy of Sciences Panel on Conceptual, Measurement, and Other Statistical Issues in Developing Cost-of Living Indexes recently chaired by Charles Schultze, the author highlights those additional areas for exploration that she believes have the greatest potential and discuss those areas she believes to be less promising.