Consumer Price Index

How BLS Measures Price Change for Elementary and High School Tuition and Fees in the Consumer Price Index

Elementary and high school tuition and fixed fees, a component of the tuition and other school fees index, is included in the education and communication group of the Consumer Price Index (CPI). Both the tuition and other school fees index and the elementary and high school tuition and fixed fees index are published monthly at the U.S. level. The education and communication index is published in all publication areas on each area's publication cycle.

The tuition and other school fees index includes the four components shown below with the relative importance of each index. These data are for the U.S. city average of the CPI for All Urban Consumers (CPI-U) as of December 2009.

Item

Relative Importance

Tuition, other school fees, and childcare 2.835
College tuition and fees 1.493
Elementary and high school tuition and fees .412
Child care and nursery school .790
Technical and business school tuition and fees .042

Elementary and high school tuition and fixed fees (hereafter referred to as E-HS tuition), accounts for about 15 percent of the weight of the tuition and other school fees index. This is the third largest component of the index.

The base period weight for each CPI item group is the out-of-pocket expenditures that households had incurred for that item in 2007-08. The weight for E-HS tuition reflects annual consumer expenditures for studies at elementary schools and high schools (grades K-12) where tuition or fixed fees or both are charged. The CPI sample of elementary and high schools that were priced was selected proportional to expenditures for students as reported by households residing in the 87 areas sampled by the CPI. In most cases, the schools that were priced were in close proximity to the 87 sampling areas. However, some students may choose to attend elementary or high schools that are outside of the 87 pricing areas and they are also included in the sample (which is unlike the samples for most other CPI items).

Student tuition, whether paid on a yearly or monthly basis, as well as necessary fixed fees (such as registration fees, athletic fees, activity fees, etc.) are eligible for pricing. As a general rule, most private schools are eligible for pricing in the E-HS tuition index because they charge tuition or fixed fees or both.

These private schools may be religious or sectarian in nature. Most of those priced in the index are affiliated with a specific religious group (Catholic, Jewish, Baptist, etc.). The overwhelming majority of public schools are not eligible for pricing because they do not charge students specific tuition or fixed fees.

In many cases, families send all of their children to the same school. To accommodate this, multiple students of the same family are eligible for pricing in this index. Charges for room and board, textbooks, lunch and uniform rental are covered elsewhere in the CPI sample.

Institutions being priced for the E-HS tuition index are eligible to be priced on a monthly basis. However, almost all elementary and high schools make any adjustments to their tuition and fixed fees before the start of each new academic year. To reduce the burden on the schools' respondents, as well as the cost of the CPI program, the pricing frequency is reduced. Most institutions are required to be priced 2 months per year. The first selected pricing month is normally the month where price changes are most likely to occur. The second selected pricing month is 2 months after the first pricing month, and is normally used to check the accuracy of the data already collected. For nonpricing months, the last collected price for each quote is carried forward for use in the current index.

Tuition and fixed fee changes for academic terms are eligible for collection once the new prices have been set and are payable to the school. Therefore, most of the changes for the E-HS tuition index are captured in the late summer or early fall of each year. Because much of the year's change is captured in one season, the CPI also publishes a seasonally adjusted E-HS tuition index. Seasonal adjustment attempts to take index changes that are clustered into a small portion of the year, and spread them over the course of the full year, thereby facilitating the analysis of the underlying trend.

Selection of characteristics to be priced

When CPI field staff seek prices for E-HS tuition, they first use probability sampling techniques to determine if one student or multiple students in a family are being priced. The field staff then use probability sampling to determine grade levels for the students, and to specify whether the selected students are or are not members of the group that the school is affiliated with. Next, school policy is checked to see how many hours per day the students attend class, how many days per week classes are attended, and the length of the academic year. In some cases, the field staff may select from different discounts (such as early payment discount) that the priced students may be eligible for. Once these data have been selected, the many characteristics associated with the students are identified to ensure that the same students are priced each collection period, or should the situation change, that the change can be readily identified. The following is an example of characteristic information that would be identified:

Issues associated with E-HS tuition

One of the most difficult problems for the CPI is to quantify changes accurately in the quality of an item and to factor these quality changes out of the item's price movements. It an item's characteristics change, a quality improvement or deterioration may have occurred. In some cases, the information supplied by the respondent may be adequate to explain the change but it may not be enough to justify quality adjustment. For example, if a school states only that their length of day has increased by 30 minutes, it could be deemed a quality improvement if the extra time is devoted to additional instruction, but it would not be deemed a quality improvement if the extra time is added to lunch or recess. In this case, further information dealing with the change would need to be supplied before any quality adjustments could be made.

Because quality change often accompanies price change when the price of an item changes significantly, BLS field staff will ask the respondent to identify a cause. For E-HS tuition, many price changes from respondents are not accompanied by resulting causes. When no causes accompany tuition change and the characteristics for the identified items remain unchanged, the price changes are reflected in the E-HS tuition index.

Additional information Additional information on the Consumer Price Index can be found in the BLS Handbook of Methods, chapter 17, "The Consumer Price Index," Bulletin 2490 (1997). This chapter is also available on the BLS Internet site (http://www.bls.gov) under the topic "Publications," or you may call the Information and Analysis Section of the CPI at (202) 691-7000.

Last Modified Date: April 21, 2010

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