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Price measurement in the United States: A decade after the Boskin Report
David S. Johnson
Chief, Division of Housing and Household Economic Statistics, Bureau of the Census.
Stephen B. Reed
Economist, Division of Consumer Prices and Price Indexes, Bureau of Labor Statistics.
Kenneth J. Stewart
Economist, Division of Consumer Prices and Price Indexes, Bureau of Labor Statistics.
This article details the important changes made to improve the Consumer Price Index (CPI) since the 1996 Boskin Report. These changes include the following: 1) the introduction of the geometric means formula to account for lower-level substitution, 2) the introduction of the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) to provide an index that accounts for upper-level substitution, 3) expansion of the use of hedonic models to improve the measurement of quality change, and 4) the institution of procedures to introduce new goods into the index more quickly by more frequent updates to the item samples.
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