How BLS Measures Price Change for Household Fuels in the Consumer Price Index
The Consumer Price Index for Household Fuels is a component of the Fuels and Utilities index, which is in the Housing
major group of the Consumer Price Index (CPI). The household fuels index measures the price
movement of residential energy items used for heating,
cooling, lighting, cooking, and other appliances and household equipment. Together with
the index for motor fuels, it makes up the special index for Energy.
Each month, the Bureau of Labor Statistics (BLS) publishes indexes, both seasonally adjusted and not seasonally adjusted, at the U.S. level for the following aggregates and items:
- fuels
- fuel oil and other household fuels
- fuel oil
- propane, kerosene and firewood
- gas (piped) and electricity
- electricity
- utility (piped) gas
In addition, BLS publishes not seasonally adjusted monthly indexes for areas grouped by
population size-classes, regions, region/size-classes, and for 14 'A-size' metropolitan
areas:
- fuels
- gas (piped) and electricity
- electricity
- utility (piped) gas
Using the same collected data supporting production of the indexes BLS calculates and publishes average price series for the price:
- Per kWh of electricity
- For 500 kWh of electricity
- Per therm of utility (piped) gas
- For 40 therms of utility (piped) gas
- For 100 therms of utility (piped) gas
- Per gallon of fuel oil
All these average price series are published for the Urban U.S., the area-size-classes,
the Census regions, the region/size-classes, and when there is sufficient sample for 14
'A-size' metropolitan areas.
Relative Importance
The relative importance of a CPI component is the percent its expenditure weight is
relative to the total expenditure weight of all items in the Consumer Price Index, based
on household expenditure data reported for a two-year reference period in the Continuing
Consumer Expenditure Survey. As of December 2007, the relative importance of the
individual items that comprise the Household Fuels Index within the U.S. city average of
the CPI for All Urban Consumers (CPI-U), are as follows:
Item |
Relative Importance |
Household energy |
4.215 |
Fuel oil |
.239 |
Propane, kerosene, firewood |
.113 |
Electricity |
2.766 |
Utility (piped) gas |
1.098 |
Sample Selection
The current sample of outlets priced for Fuel Oil and Other Household Fuels are
selected from the Point-of-Purchase Survey (POPS) and one-fourth of the sample is updated
each year. The POPS is a household survey that identifies outlets where specific items
are purchased and how much was spent in each reported outlet where such items were
purchased.
The current sample of outlets for Electricity and for Utility (piped) gas is selected
from a sampling frame constructed from the Consumer Expenditure Survey data. Respondents
to this survey report the name of the company from which they purchase their household
energy, the monthly dollar amount of their purchases, and the total units of energy
purchased.
BLS uses probability procedures to obtain the specific consumption
amounts to price over time. For Electricity and for Utility (piped) gas the amounts were
based on the monthly bills reported on the Consumer Expenditure Survey. For Fuel oil and
Other household fuels BLS data collectors used probability methods to select consumption
amounts based on information the sampled outlets provide.
Probability sampling methods are also used to select the specific detailed
characteristics associated with the consumption amounts identified for pricing. For
Electricity and for Utility (piped) gas, characteristics selected include type of rate
schedule (general residential, heating, non heating, air conditioning, hot water heating,
etc.), appropriate discounts, applicable tax jurisdictions, other unique billing
conditions (peak/off-peak usage), and price determining characteristics which affect the
price for the assigned consumption amounts.
Price Collection
Once the sample has been selected and initiated, BLS field staff price it monthly by
visiting and/or calling respondents to obtain current price and item characteristic
information in order to track price movements.
For Electricity and for Utility (piped) gas service, data are collected on the
following items:
- Service charges—a fixed charge per bill
- Consumption charges—for total monthly energy usage
- Additional charges and/or credits
- Taxes
The prices for Electricity and for Utility (piped) gas service include seasonal
changes, such as going from summer to winter rates. Also included are additional charges
and credits, such as purchase fuel adjustments.
Item |
Number of Quotes |
Electricity |
1,493 |
Utility (piped) gas service |
1,424 |
Fuel oil |
321 |
Other household fuels |
574 |
Sampling errors associated with household fuel categories and other CPI components can
be found at www.bls.gov/cpi/cpivar2008.pdf.
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: August 19, 2009