128-640: The United States Consumer Price Index ( CPI ) is a family of various consumer price indices published monthly by the United States Bureau of Labor Statistics (BLS). The most commonly used indices are the CPI-U and the CPI-W, though many alternative versions exist for different uses. For example, the CPI-U is the most popularly cited measure of consumer inflation in the United States, while
256-457: A cost of living adjustment (COLA) "to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the consumer price index for urban wage earners and clerical workers (CPI-W)". However, from December 1982 through December 2011, the all-items CPI-E rose at an annual average rate of 3.1 percent, compared with increases of 2.9 percent for both
384-794: A humid subtropical climate ( Cfa according to the Köppen climate classification .) The remainder of the Delaware Valley has a hot-summer humid continental climate ( Dfa .) PRISM Climate Group at Oregon State University Snow amounts may vary widely year-to-year and normally do vary widely within the Delaware Valley. The region has two ski resorts, Bear Creek Mountain Resort in Longswamp Township, Berks County and Spring Mountain Adventures in central Montgomery County . Using
512-408: A component of a consumer price index. Opportunity cost can be looked at in two ways, since there are two alternatives to continuing to live in an owner-occupied dwelling. One, supposing that it is one year's cost that is to be considered, is to sell it, earn interest on the owner's capital thus released, and buy it back a year later, making an allowance for its physical depreciation. This can be called
640-437: A constant standard of living . Approximations can only be computed retrospectively, whereas the index has to appear monthly and, preferably, quite soon. Nevertheless, in some countries, notably the United States and Sweden, the philosophy of the index is that it is inspired by and approximates the notion of a true cost of living (constant utility) index, whereas in most of Europe it is regarded more pragmatically. The coverage of
768-425: A constant, fixed item with fixed characteristics is being priced every period; when such an item no longer exists due to technological change in the consumer product landscape, a price is imputed using a new, existing product and estimating what its price would have been if it had the characteristics of the old product. Each category of quality-adjusted item is associated with a set of characteristics that are priced and
896-406: A consumer price index has been, and remains, a subject of heated controversy in many countries. Various approaches have been considered, each with their advantages and disadvantages. Leaving aside the quality of public services, the environment, crime, and so forth, and regarding the standard of living as a function of the level and composition of individuals' consumption, this standard depends upon
1024-480: A different set of weights, derived from a different segment of the Consumer Expenditures survey. For most programs, the weights are updated annually using the results of the previous years' Consumer Expenditure survey, though prior to 2023 data the weights were updated biennially (once every two years), and prior to the 1980s, the weights were updated approximately once per decade. Introduced in 1978,
1152-467: A few countries use the debt profile method, but in doing so, most of them behave inconsistently. Consistency would require that the index also cover the interest on consumer credit instead of the whole price paid for the products bought on credit if it covers mortgage interest payments. Products bought on credit would then be treated in the same way as owner-occupied dwellings. Variants of the debt profile method are employed or have been proposed. One example
1280-401: A fractional weight of the item as measured in a base period, P j , t {\displaystyle P_{j,t}} represents the price of the item j {\displaystyle j} as measured in the current month, and P j , t − 1 {\displaystyle P_{j,t-1}} represents the price of the same item as measured in
1408-599: A geometric means formula is usually used: ln G = ∑ j w j ln P j , t P j , t − 1 {\displaystyle \ln {G}=\sum _{j}w_{j}\ln {\frac {P_{j,t}}{P_{j,t-1}}}} where G {\displaystyle G} is the growth rate of the index, j {\displaystyle j} enumerates all relevant price measurements that are present in both months, w j {\displaystyle w_{j}} represents
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#17327731299851536-763: A higher, more aggregated level (e.g. clothing) and weighted averages of the latter provide yet more aggregated sub-indices (e.g. Clothing and Footwear). Some of the elementary aggregate indices and some of the sub-indices can be defined simply in terms of the types of goods and/or services they cover. In the case of such products as newspapers in some countries and postal services, which have nationally uniform prices. But where price movements do differ or might differ between regions or between outlet types, separate regional and/or outlet-type elementary aggregates are ideally required for each detailed category of goods and services, each with its own weight. An example might be an elementary aggregate for sliced bread sold in supermarkets in
1664-499: A larger relevant category (eg. pleasure vehicles), while the weight is properly measured in the Consumer Expenditure Survey. The CPI-U measures inflation as experienced by a representative household in a metropolitan statistical area . Rural (non-metropolitan) households, farm households, military members, and the institutionalized (eg. prisons or hospitals) are excluded from consideration; with this exclusion,
1792-749: A majority of Delaware's land mass and population. Wilmington is the most populous city in Delaware and the fifth-most populous municipality in the Delaware Valley. The lone Maryland county in the Philadelphia-Reading-Camden Combined Statistical Area is part of the region known as the Eastern Shore of Maryland . The following municipalities are all within the Philadelphia-Reading-Camden combined statistical area and part of
1920-461: A model for the marginal value of each of those characteristics. For example, the price of a smartphone is adjusted to remove (estimated) price changes due to the number of cameras, storage space, physical size, and other attributes of the smartphone. Beginning in 1983 for the CPI-U (and 1985 for the CPI-W), the pricing method for owned housing uses a framework called Renters' Equivalence. Prior to this,
2048-436: A more underlying, widespread, or fundamental inflation that affects broader sets of items. More specifically, food and energy prices are subject to large changes that often fail to persist and do not represent relative price changes. In many instances, large movements in food and energy prices arise because of supply disruptions such as drought or OPEC -led cutbacks in production. This metric was introduced by Arthur F. Burns in
2176-491: A new study was made covering expenditures in the years 1934–1936, which provided the basis for a comprehensively revised index introduced in 1940. During World War II , when many commodities were scarce and goods were rationed, the index weights were adjusted temporarily to reflect these shortages. In 1951, the BLS again made interim adjustments, based on surveys of consumer expenditures in seven cities between 1947 and 1949, to reflect
2304-431: A per-unit basis, though some commodities such as gasoline or food items are priced by unit weight. Some items are quality adjusted, meaning that the prices that are measured are adjusted to remove the change in price due to a change in quality or features of the item being introduced since the previous price was measured, a process called hedonic regression or hedonic adjustment . This is necessary in order to ensure that
2432-669: A population greater than 2.5 million (such as the Detroit-Warren-Dearborn, MI Metropolitan Statistical Area ), while the remaining two are Anchorage, Alaska and Honolulu, Hawaii (which represent all of the CBSAs in Alaska and in Hawaii, respectively). These self-representing PSUs represent 42 percent of the CPI-U target population. The remaining 52 sampled PSUs are either metropolitan areas or micropolitan statistical areas ;
2560-445: A reference period will stand at more than 100 if house prices or, in the case of a fixed-interest mortgage, interest rates rose between 2006 and 2007. The application of this principle in the owner-occupied dwellings component of a consumer price index is known as the "debt profile" method. It means that the current movement of the index will reflect past changes in dwelling prices and interest rates. Some people regard this as odd. Quite
2688-600: A special event service for concerts at Freedom Mortgage Pavilion in Camden . Philadelphia's suburbs contain a high concentration of malls, the two largest of which have at least 5,000,000 square feet (460,000 m ) of office space, and at least 600,000 square feet (56,000 m ) of retail. These are the King of Prussia mall in King of Prussia, Pennsylvania, which is the largest in the U.S. (leasable sq. feet of retail space), and
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#17327731299852816-406: A three-year average in recognition of the fact that household survey estimates are of poor quality. In some cases, some of the data sources used may not be available annually, in which case some of the weights for lower-level aggregates within higher-level aggregates are based on older data than the higher level weights. Infrequent reweighing saves costs for the national statistical office but delays
2944-699: Is a formal administrative division. As of the 2020 U.S. census , the Philadelphia-Camden-Wilmington Metropolitan Statistical Area is the seventh-largest MSA in the nation with 6,245,051 people. The MSA includes: As of 2020, the Philadelphia–Reading–Camden, PA-NJ-DE-MD CSA is the nation's ninth-largest combined statistical area with a population of 7,379,700. Philadelphia-Reading-Camden Combined Statistical Area includes: When metropolitan areas were originally defined in 1950, most of
3072-565: Is a major metropolitan and tri-state region in Northeast United States that centers on Philadelphia , the 6th-most populous city in the United States , and spans part of three states: Southeastern Pennsylvania , Southern New Jersey , and Northern Delaware . With a core of metropolitan statistical area population of 6.288 million residents, while the combined statistical area population of 7.366 million (as of
3200-468: Is by design: the CPI measures the change in expenses required for people to maintain the same standard of living. The Commission also found that 99% of all data were collected during the week, although an increasing amount of purchases happen during the weekend. Additional bias was said to stem from changes in retailing that were unaccounted for in the CPI. Some critics believe however, that because of changes to
3328-588: Is calculated and reported on a per region or country basis on a monthly and annual basis. International organizations like the Organisation for Economic Co-operation and Development (OECD) report statistical figures like the consumer price index for many of its member countries. In the US the CPI is usually reported by the Bureau of Labor Statistics . An English economist by the name of Joseph Lowe first proposed
3456-469: Is calculated by using a representative basket of goods and services. The basket is updated periodically to reflect changes in consumer spending habits. The prices of the goods and services in the basket are collected monthly from a sample of retail and service establishments. The prices are then adjusted for changes in quality or features. Changes in the CPI can be used to track inflation over time and to compare inflation rates between different countries. While
3584-416: Is involved, consider a consumer price index computed with reference to 2009 for just one sole consumer who bought her house in 2006, financing half of this sum by raising a mortgage. The problem is to compare how much interest such a consumer would now be paying with the interest that was paid in 2009. Since the aim is to compare like with like, that requires an estimate of how much interest would be paid now in
3712-562: Is often confused with the measurement of the CPI by the Bureau of Labor Statistics . The BLS publishes both a headline CPI which counts food and energy prices, and also a CPI for "all items less food and energy", or "core" CPI. None of the prominent legislated uses of the CPI excludes food and energy. However, with regard to calculating inflation, the Federal Reserve no longer uses the CPI, preferring to use core PCE instead. Some critics believe that changes in CPI calculation due to
3840-726: Is one of the top five American venture capital hubs, credited to its proximity to the New York metropolitan area and its financial and tech and biotechnology ecosystems . At least two educational institutions, Delaware Valley Regional High School in Alexandria Township, New Jersey , and Delaware Valley College in Doylestown Township, Pennsylvania , and a now defunct local newspaper, The Delaware Valley News in Frenchtown, New Jersey , are named for
3968-638: Is sometimes assigned to South Central Pennsylvania . The seven New Jersey counties in the CSA are in South Jersey . Atlantic County, Cape May County, and Cumberland County each form their own respective metropolitan statistical areas. Atlantic City , Cape May County, New Jersey , and the southern Jersey Shore , including Margate City , Ventnor City , the Wildwoods , and Sea Isle City , are major tourist destinations for people from inside and outside of
United States Consumer Price Index - Misplaced Pages Continue
4096-405: Is that purchases of new dwellings are treated as "investment" in the system of national accounts and should not enter a consumption price index. It is said that this is more than just a matter of terminological uniformity. For example, it may be thought to help understand and facilitate economic analysis if what is included under the heading "consumption" is the same in the consumer price index and in
4224-453: Is to be compared with the movement of the consumer price index, incomes must be expressed as money income plus this imaginary consumption value. That is logical, but it may not be what users of the index want. Although the argument has been expressed in connection with owner-occupied dwellings, the logic applies equally to all durable consumer goods and services. Furniture, carpets, and domestic appliances are not used up soon after purchase in
4352-463: Is to include down payments as well as interest. Another is to correct nominal mortgage rates for changes in dwelling prices or for changes in the rest of the consumer price index to obtain a "real" rate of interest. Also, other methods may be used alongside the debt profile method. Thus, several countries include a purely notional cost of depreciation as an additional index component, applying an arbitrarily estimated, or rather guessed, depreciation rate to
4480-433: Is unavailable, so indices are computed using an unweighted arithmetic or geometric mean of the prices of the sampled products. (However, the growing use of barcode scanner data is gradually making weighting information available even at the most detailed level.) These indices compare prices each month with prices in the price-reference month. The weights used to combine them into the higher-level aggregates and then into
4608-526: The w e i g h t i {\displaystyle \mathrm {weight} _{i}} terms do not necessarily sum to 1 or 100. By convention, weights are fractions or ratios summing to one, as percentages summing to 100 or as per mile numbers summing to 1000. On the European Union's Harmonized Index of Consumer Prices (HICP), for example, each country computes some 80 prescribed sub-indices, their weighted average constituting
4736-469: The Boskin Commission have led to dramatic cuts in inflation estimates. They believe that using pre-Boskin methods, which they also think are still used by most other countries, the current U.S. inflation is estimated to be around 7% per year. The BLS maintains that these beliefs are based on misunderstandings of the CPI. For example, the BLS has stated that changes made due to the introduction of
4864-900: The Cherry Hill Mall in Cherry Hill, New Jersey , which was the first enclosed mall on the East Coast. In addition, the Christiana Mall in Newark, Delaware, is a popular destination due to its proximity to Interstate 95 and because of the availability of tax-free shopping in Delaware. Malls, office complexes, strip shopping plazas, expressways, and tract housing are common sights, and more and more continue to replace rolling countryside, farms, woods, and wetlands. However, due to strong opposition by residents and political officials, many acres of land have been preserved throughout
4992-579: The Schuylkill River , Lehigh River , and Brandywine Creek . U.S. government agencies have reached various definitions of the Delaware Valley and metropolitan Philadelphia. The Office of Management and Budget (OMB) defines metropolitan statistical area (MSAs), which are regions with relatively high population densities at their cores and close economic ties throughout their respective areas. MSAs are further combined into combined statistical areas (CSAs), reflecting commuting patterns. Neither
5120-489: The University of Pennsylvania , one of the nation's eight Ivy League universities. Other major universities and colleges in the region include Drexel University , Thomas Jefferson University , Rowan University , Villanova University , Saint Joseph's University , Temple University , Rutgers University–Camden , La Salle University , the University of Delaware , Stockton University , and others. Philadelphia and
5248-421: The cost of living by a value between 0.8 and 1.6 percentage points . If CPI overestimates inflation, then claims that real wages have fallen over time could be unfounded. An overestimation of only a few tenths of a percentage point per annum compounds dramatically over time. In the 1970s and 80s the federal government began indexing several transfers and taxes including social security (see below Uses of
United States Consumer Price Index - Misplaced Pages Continue
5376-623: The geometric mean formula to account for product substitution (one of the Boskin recommended changes) have lowered the measured rate of inflation by less than 0.3% per year, and the methods now used are commonly employed in the CPIs of developed nations. Consumer price index A consumer price index ( CPI ) is a price index , the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. The CPI
5504-740: The revolutionary capital during the colonial era in which the Second Continental Congress gathered at Independence Hall and unanimously adopted the Declaration of Independence , authorized the formation of the Continental Army , and appointed George Washington its commander to resist the British . After the Continental Army's victory, Philadelphia served as the nation's first capital for most of
5632-483: The "alternative cost" approach. The other, the "rental equivalent" approach, is to let it to someone else for the year, in which case the cost is the rent that could be obtained for it. There are practical problems in implementing either of these economists' approaches. Thus, with the alternative cost approach, if house prices are rising fast, the cost can be negative and then become sharply positive once house prices start to fall, so such an index would be very volatile. On
5760-399: The "economic rent" is calculated, which adjusts for any changes in the structure or facilities. Finally, a "pure rent" is calculated, which removes from the economic rent the actual provision of utilities such as electricity and gas - these are measured in a separate index, to divide a rental contract's provided services between shelter and utilities provision. Finally, the CPI for Rent measures
5888-520: The -3 °C January isotherm as a boundary, all of the Delaware Valley is humid subtropical. The hardiness zone in the region ranges from 6b in higher areas of Berks and northern Bucks Counties to 8a in Atlantic City and Cape May. [1] Using the Trewartha climate classification system, which requires eight months to average at least 50 °F for the climate to be considered subtropical,
6016-461: The 18th century until 1800, when construction of Washington, D.C. was completed. The U.S. Constitution , the world's longest-standing body of federal law, was ratified at Independence Hall in Philadelphia in 1789. The Delaware Valley is one of the nation's leading regions for academia and academic research with a considerable number of globally-known and highly ranked universities, including
6144-564: The 2020 census), Delaware Valley is the eighth-largest metropolitan region in the United States and the 68th-largest metropolitan region in the world. In addition to Philadelphia, other major population centers in the Delaware Valley include Reading , Upper Darby Township , and Chester in Pennsylvania; Atlantic City , Camden , Vineland , and Cherry Hill in South Jersey; and Wilmington and Dover in Delaware. As of 2022,
6272-604: The CPI ). The overestimation of CPI would imply that the increases in these taxes and transfers have been greater than necessary, meaning the government and taxpayers have overpaid for them. The Commission concluded that more than half of the overestimation was due to slow adjustments in the index to new products or changes in product quality. At that time, the weights for indices like CPI-U and CPI-W were updated only once per decade; today, they are updated in January of even-numbered years. However, even with this more frequent updates,
6400-1276: The CPI can be performed as CPI = updated cost base period cost × 100 {\displaystyle {\text{CPI}}={\frac {\text{updated cost}}{\text{base period cost}}}\times 100} . The "updated cost" (i.e. the price of an item at a given year, e.g.: the price of bread today) is divided by that of the initial year (the price of bread in 1970), then multiplied by one hundred. Many but not all price indices are weighted averages using weights that sum to 1 or 100. Example: The prices of 85,000 items from 22,000 stores, and 35,000 rental units are added together and averaged. They are weighted this way: housing 41.4%; food and beverages 17.4%; transport 17.0%; medical care 6.9%; apparel 6.0%; entertainment 4.4%; other 6.9%. Taxes (43%) are not included in CPI computation. C P I = ∑ i = 1 n C P I i × w e i g h t i ∑ i = 1 n w e i g h t i {\displaystyle \mathrm {CPI} ={\frac {\sum _{i=1}^{n}\mathrm {CPI} _{i}\times \mathrm {weight} _{i}}{\sum _{i=1}^{n}\mathrm {weight} _{i}}}} where
6528-417: The CPI is not a perfect measure of inflation or the cost of living , it is a useful tool for tracking these economic indicators. A CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. Sub-indices and sub-sub-indices can be computed for different categories and sub-categories of goods and services, which are combined to produce
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#17327731299856656-567: The CPI is one of the most closely watched national economic statistics. The index is usually computed monthly, or quarterly in some countries, as a weighted average of sub-indices for different components of consumer expenditure, such as food, housing, shoes, and clothing, each of which is, in turn, a weighted average of sub-sub-indices. At the most detailed level, the elementary aggregate level (for example, men's shirts sold in department stores in San Francisco), detailed weighting information
6784-399: The CPI would measure the price of homes, the cost of monthly mortgage payments, property taxes, insurance, and maintenance. However, this method conflated the investment portion of owned housing (as an investment that was financed via all of those expenditures) and the consumption portion (the flow of services - ie. shelter - to the occupant household). In addition, new financial developments at
6912-426: The CPI-U and CPI-W might still be excessively slow in responding to new technologies. For example, by 1996 there were over 47 million cellular phone users in the United States, but the weights for the CPI did not account for this new product until 1998. This new product lowered costs of communication when away from the home. The commission recommended that the BLS update weights more frequently to prevent upward bias in
7040-558: The CPI-U and CPI-W. This suggests that the elderly have been losing purchasing power at the rate of roughly 0.2 (=3.1–2.9) percentage points per year. In 2003 Hobijn and Lagakos estimated that the social security trust fund would run out of money in 40 years using CPI-W and in 35 years using CPI-E. The Consumer Price Index was initiated during World War I , when rapid increases in prices, particularly in shipbuilding centers, made an index essential for calculating cost-of-living adjustments in wages. To provide appropriate weighting patterns for
7168-587: The CPI-U covers about 93 percent of the US population. The items considered, prices collected, and the locations where the prices are collected are all designed to represent the spending habits of such households. The BLS divides the urban population into Primary Sampling Units (PSUs), equivalent to core-based statistical areas from the 2010 United States census . Prices are measured in only 75 of these PSUs. 23 of these CBSAs are known as self-representing PSUs, whose measured price changes apply to only that PSU. Of these CBSAs, 21 are metropolitan statistical areas with
7296-530: The CPI-U is the most widely used CPI measure in popular media and understanding. Its sampling is designed to represent the consumption baskets of residents of urban and metropolitan areas , which collectively account for over 90 percent of the US population. The urban wage earner and clerical worker population consists of consumer units consisting of clerical workers, sales workers, craft workers, operative, service workers, or laborers. (Excluded from this population are professional, managerial, and technical workers;
7424-498: The CPI-U was also introduced. The CPI-U took into account the buying patterns of professional and salaried workers, part-time workers, the self-employed, the unemployed, and retired people, in addition to wage earners and clerical workers. In 1995, the Senate Finance Committee appointed a commission to study CPI's ability to estimate inflation. The CPI commission found in their study that the index overestimated
7552-455: The CPI-W is used to index Social Security benefit payments. The CPI measures the monthly price change of a basket of discretionary consumption goods whose price is borne by the consumer. There are eight major categories of items that are included in the CPI coverage; each includes both goods and services: In line with this framework, the CPI excludes items such as life insurance, investment securities, financing costs, and house prices (though
7680-926: The Delaware Valley The Delaware Valley and several areas bordering it, including the Lehigh Valley , are part of the Philadelphia media market, the fourth-largest media market in the nation as of 2023. The two main newspapers are The Philadelphia Inquirer and the Philadelphia Daily News , owned by the Philadelphia Media Network . Local television channels include KYW-TV 3 (CBS), WPVI 6 (ABC), WCAU 10 (NBC), WHYY-TV 12 (PBS), WPHL-TV 17 (MyNetworkTV), WTXF 29 (FOX), WPSG 57 (CW), and WPPX 61 ( Ion ). Radio stations serving
7808-506: The Delaware Valley are a biotechnology hub. As of 2024, metropolitan Philadelphia ranks as one of the Big Five U.S. venture capital hubs, facilitated by its proximity to both New York City's entrepreneurial and financial ecosystems and to the federal regulatory environment of Washington, D.C. Elsewhere in the Delaware Valley, South Jersey has emerged as an East Coast epicenter for logistics and major warehouses. Culturally ,
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#17327731299857936-411: The Delaware Valley. Older townships and large boroughs, such as Cheltenham , Norristown , Jenkintown , Upper Darby , and West Chester retain distinct community identities while engulfed in suburbia. Mid-Atlantic American English and its subset, Philadelphia English , are two common dialects of American English in Philadelphia and the Delaware Valley. Listing of the professional sports teams in
8064-609: The Delaware Valley. Other major municipalities in South Jersey include Cherry Hill and Camden , which is across the Delaware River , east of Philadelphia. Burlington , Camden , Gloucester , and Salem Counties comprise the Delware River Region, one of seven officially recognized tourism regions by the New Jersey Department of Tourism. The two counties of Delaware in the CSA constitute
8192-556: The Delaware Valley: The Delaware Valley has four distinct seasons with ample precipitation and is divided by the 0 °C (32 °F) January isotherm . Philadelphia and the New Jersey portion of the area, almost all of the Delaware and Maryland portions, most of Delaware County and lower Bucks County, lowland southern Chester County, and some southern and lowland areas of Montgomery County have
8320-471: The Northern region. Most elementary aggregate indices are necessarily 'unweighted' averages for the sample of products within the sampled outlets. However, in cases where it is possible to select the sample of outlets from which prices are collected so as to reflect the shares of sales to consumers of the different outlet types covered, self-weighted elementary aggregate indices may be computed. Similarly, if
8448-425: The Philadelphia metropolitan area's gross domestic product (GDP) exceeds US$ 518 billion, making it the tenth-largest metropolitan economy in the nation. The Delaware Valley has been influential in the nation's history and economy and home to many people and sites significant to American culture , history , and politics. Philadelphia is sometimes known as "The Birthplace of America" in reference to its role as
8576-880: The Trenton SMSA to form the Philadelphia-Wilmington-Trenton Consolidated Metropolitan Statistical Area. At the same time, Cape May County, New Jersey was added to the Atlantic City SMSA. The "Philadelphia-Wilmington-Trenton" became obsolete one census later when Trenton, New Jersey was moved to the New York-Newark-Bridgeport CSA. The Philadelphia-Wilmington-Vineland CSA included the Philadelphia-Wilmington-Camden MSA and
8704-787: The Vineland-Millville-Bridgeton MSA. In 2000, Kent County, Delaware was designated the Dover MSA, and Kent County and Atlantic City were added to the Philadelphia CSA in 2010. As a result of new 2010 definitions, based on a threshold of 15% labor interchange between MSAs, two additional MSAs were added, Ocean City, New Jersey and Reading, Pennsylvania . The CSA to which they belong is known as Philadelphia-Reading-Camden. The Philadelphia-Reading-Camden combined statistical area includes sixteen counties in four states. The five Pennsylvania counties in
8832-639: The actual PSU chosen to be priced was chosen randomly. By sampling both large areas (self-representing PSUs) and smaller areas (nonself-representing PSUs), the CPI-U sample represents the full urban population of the United States, including areas of large population (such as the Houston Metropolitan Area ) and areas with small population (such as the Paris, Texas micropolitan area ). Each month, BLS data collectors collect about 94,000 prices. For most items, these prices are collected by contacting
8960-434: The amount and range of goods and services they consume. These include the service provided by rented accommodation, which can readily be priced, and the similar services yielded by a flat or house owned by the consumer who occupies it. Its cost to a consumer is, according to the economic way of thinking, an " opportunity cost ," namely what he or she sacrifices by living in it. This cost, according to many economists, should form
9088-485: The area include: WRTI , WIOQ , WDAS (AM) , and WTEL . Philadelphia is heavily Democratic , having voted for the Democratic candidate in every presidential election since 1936 . The surrounding suburban counties are key political areas in Pennsylvania, which itself is an important swing state in federal politics. South Jersey has consistently voted Democratic at the presidential level in recent years, although
9216-559: The area now in the Delaware Valley was split between four metropolitan areas, or standard metropolitan areas, as they were then called. The Philadelphia SMA included Philadelphia , Bucks , Chester , Delaware , and Montgomery counties in Pennsylvania , and Burlington , Camden , and Gloucester counties in South Jersey . The Wilmington SMA included New Castle County in Delaware and Salem County in South Jersey. Berks County
9344-432: The base year, often differs both from the weight-reference period and the price-reference period. This is just a matter of rescaling the whole time series to make the value for the index reference period equal to 100. Annually revised weights are a desirable but expensive feature of an index; the older the weights, the greater the divergence between the current expenditure pattern and that of the weight reference period. It
9472-402: The change in economic rents, because utilities are often provided in rental agreements; while the CPI for Owners Equivalent Rent (OER) measures the change in pure rents. For each entry level item (eg. apples in the Philadelphia metropolitan area ) many different price quotes were made in each month. To aggregate these individual price measurements into an index for the item-location combination,
9600-442: The classifications they use rarely correspond to COICOP categories. The increasingly widespread use of bar codes, scanners in shops has meant that detailed cash register printed receipts are provided by shops for an increasing share of retail purchases. This development makes possible improved Household Expenditure surveys, as Statistics Iceland has demonstrated. Survey respondents keeping a diary of their purchases need to record only
9728-652: The colony of New Sweden , though this was not officially recognized by the Dutch Empire which re-asserted control in 1655. The area was taken by the English in 1664. The name Delaware comes from Thomas West, 3rd Baron De La Warr , who had arrived at Jamestown, Virginia in 1610, just as original settlers were about to abandon it, and thus maintaining the English foothold on the North American continent. In
9856-410: The consumer (including Medicare Part B) are all included in the CPI, because consumers directly bear these costs. Finally, the prices of illegal goods such as marijuana are not measured, and so are also excluded. Some items, such as pleasure boats and pleasure aircraft, indeed belong in the scope of the CPI but are impractical to price; for these items, the price change is imputed to be the price change of
9984-658: The consumer basket, different price indices may be calculated for groups with various demographic characteristics. For example, consumer price indices calculated according to the weightings in the consumer basket of income groups may show significantly different trends. No firm rules can be suggested on this issue for the simple reason that the available statistical sources differ between countries. However, all countries conduct periodical household-expenditure surveys and all produce breakdowns of consumption expenditure in their national accounts . The expenditure classifications used there may however be different. In particular: Even with
10112-433: The consumption patterns of seniors are different from those of younger people. For the BLS, "elderly" means that the reference person or a spouse is at least 62 years of age; approximately 24 percent of all consumer units meet this definition. Individuals in this group consume roughly double the amount of medical care as all consumers in CPI-U or employees in CPI-W. In January of each year, Social Security recipients receive
10240-474: The different approaches are multidimensional, including feasibility, views on the way the index should and would move in particular circumstances, and theoretical properties of the index. Philadelphia metropolitan area Philadelphia–Camden–Wilmington, PA–NJ–DE–MD Other Statistical Areas in the Philadelphia CSA The Delaware Valley , sometimes referred to as Greater Philadelphia , Philadelphia metropolitan area , or Philadelphia tri-state area ,
10368-602: The early 1700s, Huguenot refugees from France by way of Germany and then England began settling in the Delaware River Valley. Specifically, they left their mark in Hunterdon County, New Jersey ( Frenchtown ) and Bethlehem, Pennsylvania . Many residents commute to jobs and travel in Philadelphia, Camden, Wilmington, and the surrounding suburbs with the help of expressways , trains , and buses . There are currently no transit connections to Reading,
10496-481: The early 1970s, when food and especially oil prices were quite volatile, as an inflation metric that was less subject to short term shocks. Today, however, the Federal Reserve targets the average level personal consumption expenditures price index , not Core CPI, primarily because it covers a larger portion of the economy and so is a more general measure of price inflation than the CPI. This index applies to
10624-421: The estimation of weights: use all the available information and accept that rough estimates are better than no estimates. Ideally, in computing an index, the weights would represent current annual expenditure patterns. In practice, they necessarily reflect past using the most recent data available or, if they are not of high quality, some average of the data for more than one previous year. Some countries have used
10752-421: The index from a failure to properly account for the benefits of new products. Additional upward biases were said to come from several other sources. Fixed weights do not accommodate consumer substitutions among commodities, such as buying more chicken when the price of beef increases. Because the CPI assumes that people continue to buy beef, it would increase even if people are buying chicken instead. However, this
10880-498: The index may be limited. Consumers' expenditure abroad is usually excluded; visitors' expenditure within the country may be excluded in principle if not in practice; the rural population may or may not be included; certain groups, such as the very rich or the very poor, may be excluded. Savings and investment are always excluded, though the prices paid for financial services provided by financial intermediaries may be included along with insurance. The index reference period, usually called
11008-530: The index, it reflected the relative importance of goods and services purchased in 92 different industrial centers in 1917–1919. Periodic collection of prices was started, and in 1919 the Bureau of Labor Statistics began publication of separate indexes for 32 cities. Regular publication of a national index, the U.S. city average began in 1921, and indexes were estimated back to 1913 using records of food prices . Because people's buying habits had changed substantially,
11136-402: The index. An 'elementary aggregate' is a lowest-level component of expenditure: this has a weight, but the weights of each of its sub-components are usually lacking. Thus, for example: Weighted averages of elementary aggregate indices (e.g. for men's shirts, raincoats, women's dresses, etc.) make up low-level indices (e.g. outer garments). Weight averages of these, in turn, provide sub-indices at
11264-432: The individual price observations can all be weighted. This may be the case, for example, where all selling is in the hands of a single national organization which makes its data available to the index compilers. For most lower level indices, however, the weight will consist of the sum of the weights of a number of elementary aggregate indices, each weight corresponding to its fraction of the total annual expenditure covered by
11392-413: The introduction into the index of new types of expenditure. For example, subscriptions for Internet service entered index compilation with a considerable time lag in some countries, and account could be taken of digital camera prices between re-weightings only by including some digital cameras in the same elementary aggregate as film cameras. The way in which owner-occupied dwellings should be dealt with in
11520-401: The market shares of the different types of products represented by product types are known, even only approximately, the number of observed products to be priced for each of them can be made proportional to those shares. The outlet and regional dimensions noted above mean that the estimation of weights involves a lot more than just the breakdown of expenditure by types of goods and services, and
11648-492: The metropolitan statistical area are collectively known as Southeastern Pennsylvania. In addition to Philadelphia, major municipalities in Southeastern Pennsylvania include the inner suburbs of Upper Darby Township and Bensalem Township . Berks County , which forms its own MSA and contains the CSA's second largest city, Reading , is occasionally not considered to be part of Southeastern Pennsylvania and
11776-595: The most important effects of immediate postwar changes in buying patterns. The index was again revised in 1953 and 1964. In 1978, the index was revised to reflect the spending patterns based upon the surveys of consumer expenditures conducted in 1972–1974. A new and expanded 85-area sample was selected based on the 1970 Census of Population. The Point-of-Purchase Survey (POPS) was also introduced. POPS eliminated reliance on outdated secondary sources for screening samples of establishments or outlets where prices are collected. A second, more broadly based CPI for All Urban Consumers,
11904-551: The national HICP. The weights for these sub-indices will consist of the sum of the weights of a number of component lower level indices. The classification is according to use, developed in a national accounting context. This is not necessarily the kind of classification that is most appropriate for a consumer price index. Grouping together of substitutes or of products whose prices tend to move in parallel might be more suitable. For some of these lower-level indices detailed reweighing to make them be available, allowing computations where
12032-399: The national income and expenditure accounts. Since these accounts include the equivalent rental value of owner-occupied dwellings, the equivalent rental approach would have to be applied to the consumer price index too. But the national accounts do not apply it to other durables, so the argument demands consistency in one respect but accepts its rejection in another. The other argument is that
12160-570: The necessary adjustments, the national-account estimates and household-expenditure surveys usually diverge. The statistical sources required for regional and outlet-type breakdowns are usually weak. Only a large-sample Household Expenditure survey can provide a regional breakdown. Regional population data are sometimes used for this purpose, but need adjustment to allow for regional differences in living standards and consumption patterns. Statistics of retail sales and market research reports can provide information for estimating outlet-type breakdowns, but
12288-624: The number of separately weighted indices composing the overall index depends upon two factors: How the weights are calculated, and in how much detail, depends upon the availability of information and upon the scope of the index. In the UK the retail price index (RPI) does not relate to the whole of consumption, for the reference population is all private households with the exception of pensioner households that derive at least three-quarters of their total income from state pensions and benefits, and "high income households" whose total household income lies within
12416-402: The opportunity cost of the use of durables is impracticable. Another approach is to concentrate on spending. Everyone agrees that repairs and maintenance expenditures for owner-occupied dwellings should be covered by a consumer price index, but the spending approach would include mortgage interest too. This turns out to be quite complicated, both conceptually and in practice. To explain what
12544-420: The other hand, with the rental equivalent approach, there may be difficulty estimating the movement of rental values for types of property that are not actually rented. If one or other of these measures of the consumption of the services of owner-occupied dwellings is included in consumption, then it must be included in income too, for income equals consumption plus saving. This means that if the movement of incomes
12672-436: The overall index relate to the estimated expenditures during the preceding whole year of the consumers covered by the index on the products within its scope in the area covered. Thus, the index is a fixed-weight index but rarely a true Laspeyres index since the weight-reference period of a year and the price-reference period, usually a more recent single month, do not coincide. Ideally, all price revalidations are accepted, and
12800-511: The overall index with weights reflecting their shares in the total of the consumer expenditures covered by the index. It is one of several price indices calculated by most national statistical agencies. The annual percentage change in the CPI is used as a measure of inflation . A CPI can be used to index (i.e., adjust for the effect of inflation) the real value of wages , salaries , and pensions ; to regulate prices; and to deflate monetary magnitudes to show changes in real values. In most countries,
12928-628: The previous month. For some shelter services, some utilities and government fees, and medical services, a Laspeyres formula is used instead: G = ∑ j w j P j , t P j , b ∑ j w j P j , t − 1 P j , b {\displaystyle G={\frac {\sum _{j}w_{j}{\frac {P_{j,t}}{P_{j,b}}}}{\sum _{j}w_{j}{\frac {P_{j,t-1}}{P_{j,b}}}}}} where P j , b {\displaystyle P_{j,b}} represents
13056-485: The price changes for all other PSUs are not measured in those PSUs themselves, but are imputed to be equivalent to the price change in one of the 52 sampled PSUs that is deemed to be equivalent. The clustering of all PSUs into equivalence classes is called stratification; nonself-representing PSUs are stratified using a variant of the k-means clustering algorithm, using four variables: latitude, longitude, median property value, and median household income. Within each stratum,
13184-410: The price of a fixed-quality basket of goods. The current method instead measures only the rental payments for rented units, and for owned housing, imputes the rental equivalence - the monthly amount that the house would rent for, if it was rented out instead of occupied by the owner. First, rental payments are priced and adjusted for depreciation of the property (via the age-bias regression model). Then,
13312-517: The price of the item in the base period. The geometric formula implicitly assumes that consumers exhibit substitution behavior among the various different quoted items (such as apples purchased from one particular grocery store versus another grocery store), whereas the Laspeyres formula does not assume such substitution behavior - indeed, the Laspeyres items are not considered to be exactly uniform or substitutable with each other, even if they represent
13440-457: The prices of new dwellings should exclude that part reflecting the value of the land, since this is an irreproducible and permanent asset that cannot be said to be consumed. This would presumably mean deducting site value from the price of a dwelling, with site value being defined as the price the site would fetch at auction if the dwelling were not on it. How this is to be understood in the case of multiple dwellings remains unclear. The merits of
13568-413: The principle thus requires that the index for our one house owner reflect the movement of the prices of houses like hers from 2006 to 2007 and the change in interest rates. If she took out a fixed-interest mortgage, it is the change in interest rates from 2006 to 2007 that counts; if she took out a variable-interest mortgage, it is the change from 2009 to 2010 that counts. Thus, her current index with 1999 as
13696-448: The region is home to the dialect or accent known as Philadelphia English , shares a unique cuisine known as Philadelphia cuisine , has played a formidable role in popular music, and is known for having one of the nation's most passionate and devoted sports cultures centered around its five professional sports teams . The Delaware Valley is geographically associated and proximate to the Delaware River and its three primary tributaries,
13824-639: The region is slightly more Republican-leaning than North Jersey and has voted for Republicans at the state and local level. New Castle County's Democratic lean and large share of Delaware's population has tended to make Delaware as a whole vote for Democrats, while the less populous Kent County is more competitive. Recent well-known political figures from the Greater Philadelphia area include current U.S. President Joe Biden , former Pennsylvania Governor Ed Rendell and late former U.S. Senator Arlen Specter . The following congressional districts of
13952-511: The region only has seven such months, so the area considered Cfa by Köppen is oceanic ( Do ) in the Trewartha system. As of 2021, the Philadelphia-Camden-Wilmington Metropolitan Statistical Area has a gross domestic product of $ 477.58 billion, the tenth-largest among the nation's MSAs. The MSA's nominal gross domestic product of $ 431 billion is comparable to countries , such as Belgium , Iran , and Thailand . Metropolitan Philadelphia
14080-615: The region. The Delaware Valley Regional Planning Commission (DVRPC) serves all of the counties of the Delaware Valley MSA except for the counties in the Wilmington, DE-MD-NJ Metropolitan Division. However, in addition to the Delaware Valley, DVRPC's jurisdiction includes Mercer County, New Jersey , which OMB classifies as the Trenton-Princeton, NJ MSA and part of the larger New York-Newark CSA . The valley
14208-594: The same category of item and in the same PSU. Each item is given a weight, used in the above formula, so that items that consumers spend more on are weighted higher (ie. with more importance) than items that consumers spend less on. These weights derive from the Consumer Expenditure survey, which collates how much money consumers spend on various consumption items. The various CPI programs (such as CPI-U and CPI-W) are designed to represent different groups of US consumers, and typically achieve this goal by using
14336-403: The same target population as the CPI-U, but the weights are updated each month. This allows the weights to evolve more gracefully with people's consumption patterns; for CPI-U, the weights are changed only in January of even-numbered years and are held constant for the next two years. Since at least 1982, the BLS has also computed a consumer price index for the elderly to account for the fact that
14464-540: The second largest municipality in the region. Major: Secondary: The Cape May–Lewes Ferry crosses the mouth of the Delaware Bay between Cape May County, New Jersey and Sussex County, Delaware ; U.S. Route 9 uses this ferry. The Riverlink Ferry operates hourly ferry service over the Delaware River between the Camden Waterfront and Penn’s Landing in Philadelphia . They also operate
14592-418: The self-employed; short-term workers; the unemployed; and retirees and others not in the labor force.) More than one half of the consumer unit's income has to be earned from the above occupations, and at least one of the members must be employed for 37 weeks or more in an eligible occupation. The consumer price index for urban wage earners and clerical workers (CPI-W) is a continuation of the historical index that
14720-506: The stores where the consumer purchases were made and measuring the price directly. This is usually by visiting the outlet in person (representing 2/3 of quotes) but sometimes via telephone or the store's website: as of 2017 about 8 percent of price quotes are taken from an online store, roughly in line with the fraction of consumer retail spending that goes through e-commerce . Other specific items, such as airfares, are priced via alternative, industry-specific data sources. Most prices are made on
14848-911: The theory of price basket index in 1822. His fixed basket approach was relatively simple as Lowe computed the price of a list of goods in period 0 and compared the price of that same basket of goods in period 1. Since his proposed theories however were elementary, later economists built on his ideas to form our modern definition. consumer price index = market basket of desired year market basket of base year × 100 {\displaystyle {\text{consumer price index}}={\frac {\text{market basket of desired year}}{\text{market basket of base year}}}\times {\text{100}}} or CPI 2 CPI 1 = price 2 price 1 {\displaystyle {\frac {{\text{CPI}}_{2}}{{\text{CPI}}_{1}}}={\frac {{\text{price}}_{2}}{{\text{price}}_{1}}}} Alternatively,
14976-414: The time meant that the data sources in the old method were becoming unrepresentative of consumers total costs of housing. For example, mortgages with shorter duration or variable rates, or financing at below-bank rates all were increasingly unreflected in federal data. The previous method was also unable to account for changes in quality of the sampled housing stock, while the CPI conceptual framework measures
15104-436: The top four per cent of all households. The result is that it is difficult to use data sources relating to total consumption by all population groups. For products whose price movements can differ between regions and between different types of outlet: The situation in most countries comes somewhere between these two extremes. The point is to make the best use of whatever data are available. Due to differences in weightings in
15232-460: The total of purchases when itemized receipts were given to them and keep these receipts in a special pocket in the diary. These receipts provide not only a detailed breakdown of purchases but also the name of the outlet. Thus response burden is markedly reduced, accuracy is increased, product description is more specific and point of purchase data are obtained, facilitating the estimation of outlet-type weights. There are only two general principles for
15360-530: The value of owned housing, distinct from a house price, is included in the CPI), as these are considered to be investment items, not consumption. Also excluded are income and property taxes, employer-provided benefits, and the portion of healthcare costs paid by insurance plans or government programs such as Medicare , since these prices are not borne directly by consumers. However, sales and excise taxes, out-of-pocket healthcare costs, and health insurance premiums paid by
15488-572: The value of the stock of owner-occupied dwellings. Finally, one country includes both mortgage interest and purchase prices in its index. The third approach simply treats the acquisition of owner-occupied dwellings in the same way as acquisitions of other durable products are treated. This means: Furthermore, expenditure on enlarging or reconstructing an owner-occupied dwelling would be covered, in addition to regular maintenance and repair. Two arguments of almost theological character are advanced in connection with this transactional approach. One argument
15616-519: The way that food is. Like dwellings, they yield a consumption service that can continue for years. Furthermore, since strict logic is to be adhered to, there are durable services as well that ought to be treated in the same way; the services consumers derive from appendectomies or crowned teeth continue for a long time. Since estimating values for these components of consumption has not been tackled, economic theorists are torn between their desire for intellectual consistency and their recognition that including
15744-463: The way that the CPI is calculated, and because energy and food price changes were excluded from the Federal Reserve's calculation of " core inflation ", that inflation is being dramatically underestimated. The second argument is unrelated to the CPI, except insofar as the calculation of CPI is modified in response to a perceived overstatement of inflation. The Federal Reserve's policy of ignoring food and energy prices when making interest rate decisions
15872-462: The weights would relate to the composition of expenditure during the time between the price-reference month and the current month. There is a large technical economics literature on index formulas that would approximate this and that can be shown to approximate what economic theorists call a true cost-of-living index . Such an index would show how consumer expenditure would have to move to compensate for price changes so as to allow consumers to maintain
16000-422: The year 2010 on a similar house bought and 50% mortgage-financed three years ago, in 2007. It does not require an estimate of how much that identical person is paying now on the actual house she bought in 2006, even though that is what personally concerns her now. A consumer price index compares how much it would cost now to do exactly what consumers did in the reference period with what it cost then. Application of
16128-737: Was designated as the Reading SMA and Atlantic County, New Jersey was the Atlantic City SMA. In 1960, Cecil County, Maryland was added to what was now the Wilmington Standard Metropolitan Statistical Area (SMSA). In 1980, Cumberland County, New Jersey was defined as the Vineland-Millville-Bridgeton SMSA. In 1990, the Philadelphia, Wilmington and Vineland-Millville-Bridgeton SMSAs were merged with
16256-407: Was introduced after World War I for use in wage negotiation. As new uses were developed for the CPI, the need for a broader and more representative index became apparent. The Social Security Administration uses the CPI-W as the basis for its periodic COLA (cost-of-living adjustment). A Core CPI index is a CPI that excludes goods with high price volatility , typically food and energy, so as to gauge
16384-682: Was the territory of the Susquehannock and Lenape , who are recalled in place names throughout the region. The region became part of the Dutch colony of New Netherland after the exploration of Delaware Bay in 1609. The Dutch called the Delaware River the Zuyd Rivier , or South River, and considered the lands along it banks and those of its bay to be the southern flank of its province of New Netherland . In 1638, it began to be settled by Swedes, Forest Finns, Dutch, and Walloons and became
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