Consumer Price Index

Hedonic Quality Adjustment in the CPI

Overview

The CPI is calculated using prices for a fixed basket of goods and services through time. While the basket is periodically revised to reflect changing consumer expenditures, some items being priced in the sample come and go from the marketplace, making collection of these prices from month to month difficult. When an item is no longer available in the marketplace, a similar replacement item is selected. Often there are no similar items from which to choose, and as a result, a less comparable item is selected, potentially introducing quality change and an associated price differential into the index. The hedonic quality adjustment method removes any price differential attributed to a change in quality by adding or subtracting the estimated value of that change from the price of the old item.

More information on hedonic quality adjustment may be found on our page containing responses to frequently asked questions.

CPI Item Categories that Utilize Hedonic Quality Adjustments

Item Relative Importance December 2011
Men’s Suits, Sport Coats and Outerwear (PDF) 0.121
Men’s Shirts and Sweaters (PDF) 0.214
Men’s Pants and Shorts (PDF) 0.147
Boys’ Apparel (PDF) 0.172
Women’s Outerwear (PDF) 0.094
Women's Dresses (PDF) 0.154
Women's Suits and Separates (PDF) 0.564
Girls' Apparel (PDF) 0.256
Men’s Footwear (PDF) 0.205
Boys' and Girls' Footwear (PDF) 0.149
Women’s Footwear (PDF) 0.310
Educational Books and Supplies (PDF) 0.197
Major Appliances (PDF) 0.158
Televisions (PDF) 0.175
Other Video Equipment (PDF) 0.028

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Last Modified Date: February 23, 2012

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