CHEN Lishuang,ZHU Dan:The Problems of China's CPI Compilation Methods and Suggestions on Further Reformation

Abstract：CPI is one of the core indicators in macroeconomic areas, which has also got attention from the governments, businesses and residents for a long time. CPI plays a decisive role in practical applications and it is meaningful to improve and optimize the compilation method. However, as a developing country, China's CPI compilation is still in transition period to international norms. So, there are still some imperfections of the compilation methods, which often lead to public confusions, misunderstandings, disagreements and incredulity from researchers. According to the relevant international standards of “Consumer Price Index Manual: Theory and Practice” and related countries' practical experience, considering China's real economic situation, this paper summarizes and analyzes several major issues, namely substitution bias issue of the element CPI formula, updating frequency issue of CPI representation basket and weights, quality change bias problem of goods and new products, treatment problem of seasonal products, treatment problem of owner-occupied housing services, systematic preparation issues of special price indexes. Accordingly, this paper conducts a deep analysis on the possible direction of improvement.

Key words： Consumer Price Index    Compilation Methods    Problems    Consumer Price Index Manual    Series of Suggestions

source:Finance & Trade Economics ,No.12,2014