Author
James Goodchild
Abstract
The Consumers Price Index (CPI) captures the broad pattern of price-level changes faced by households over the long term, but over shorter horizons the trend in price change may be masked by one-off events such as supply disturbances and seasonality which can induce volatile short-term price behaviour. In order to provide an indication of the trend in the CPI over time, alternative statistics can be calculated which filter some of the short-term disturbances that may affect the CPI. These alternative statistics, sometimes known as trend measures of price-level change, attempt to isolate the more persistent component of general price-level changes.
Statistics New Zealand has published trend measures of CPI price-level change since the September 2003 quarter. This paper discusses the usefulness of these measures and the methodology used in their calculation.
Trend measures of price level change: Trimmed means and weighted medians (PDF, 209KB)