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December 1996, Vol. 119, No. 12

The redesign of the CPI geographic sample

Janet L. Williams

The most basic element of the Consumer Price Index (CPI) decennial revision program is the selection of new CPI samples. The selection of geographic areas is the first stage of the CPI’s multistage sample design. In subsequent stages, BLS analysts select the outlets (places where area residents make purchases), goods and services (items purchased), and residents’ housing units.

Historically, the Bureau of Labor Statistics has used the Office of Management and Budget’s (OMB) definition of Metropolitan Areas first to determine the geographic boundary between the metropolitan and nonmetropolitan areas of the United States for the CPI,1 and second to divide the metropolitan United States into geographic sections called primary sampling units (hereafter, called sampling units). However, there are five sampling units within the metropolitan area that are not OMB-designated Metropolitan Areas.2 In the nonmetropolitan area (a total of 77 percent of U. S. land), BLS forms nonmetropolitan sampling units. In general, a sampling unit is delineated by county borders (with some exceptions in New England), and can comprise several counties.

Currently, BLS publishes the Consumer Price Index for All Urban Consumers (CPI-U) which covers residents of the metropolitan area, as well as residents of urban parts of the nonmetropolitan area.3 Based on the 1990 census, 87 percent of the U.S. population is included in the CPI-U definition. In 1989, when planning began for the 1998 revision of the CPI, one major change envisioned was to publish a Total U.S. Population Consumer Price Index, the CPI-T. To accommodate this expanded CPI-T, a larger number of sampling units needed to be selected throughout the country to represent the previously unrepresented population.

However, an increase in the number of selected sampling units entails an increase in the total cost of the CPI. When the sampling unit selection process was scheduled to begin in 1993, no decision to publish the CPI-T had been made. To meet the deadline for sampling unit selection, BLS decided to use a dual strategy when forming nonmetropolitan sampling units and determining how many sampling units to select from each of the four census regions.

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1 Each of the decennial census-based Metropolitan Areas is either a Metropolitan Statistical Area, Primary Metropolitan Statistical Area, or Consolidated Metropolitan Statistical Area. For more information, see the Statistical Policy Office of the Office of Management and Budget (OMB) Attachments to OMB Bulletin No. 93–05, Metropolitan Areas 1992, Lists I–IV. The CPI metropolitan area includes all OMB-designated Metropolitan Areas.

2 The five sampling units in the metropolitan area that are not OMB-designated Metropolitan Areas are the Los Angeles suburbs, CA, sampling unit, the three sampling units that together form the New York-Northern New Jersey-Long Island, NY–NJ–CT–PA publication area, and the Washington, DC–MD–VA–WV sampling unit. (See appendix 2, pages 70–77.)

3 BLS also publishes the CPI-W, which covers urban wage earners and clerical workers.

Related BLS programs
Consumer Price Index
Related Monthly Labor Review articles
Changing the item structure in the Consumer Price Index. December 1996.
New methodology for selecting outlet samples. December 1996.
Overview of the 1998 revision of the Consumer Price Index. December 1996.
Publication strategy for the 1998 revised Consumer Price Index. December 1996.
Revision of the CPI housing sample and estimators. December 1996.
Revision of the CPI hospital services component. December 1996.

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