6461.0 - Australian Consumer Price Index: Concepts, Sources and Methods, 2005  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 17/08/2005   
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Contents >> 1. Introduction


1.1 This publication provides a comprehensive description of price index theory and methodology, focusing on the Australian Consumer Price Index (CPI) and the concepts, sources and methods behind its compilation. It also provides some insight into the kinds of conceptual and practical difficulties that the Australian Bureau of Statistics (ABS) encounters in compiling the CPI and how it deals with these challenges.

1.2 The ABS currently publishes a brief description of the CPI in A Guide to the Consumer Price Index, 14th Series (cat. no. 6440.0). The Guide was prepared for those interested in a straightforward and brief account of the main features of the CPI. This publication, on the other hand, is aimed at those users who need a deeper understanding of the CPI and of the methods and techniques adopted to deal with the complex situations that arise in constructing price indexes across the whole spectrum of household consumer expenditure.


1.3 The CPI is compiled quarterly by the ABS for quarters ending in March, June, September and December each year. The quarterly index numbers are usually published between three and four weeks after the end of the quarter in Consumer Price Index, Australia (cat. no. 6401.0).

1.4 The CPI is reviewed and reweighted about every five years. The last significant review of the CPI resulted in the 13th series of the index being introduced in respect of the September quarter 1998. Several major changes were made to the index at that time, most notably the decision that the CPI would change from a measure of living costs of employee households to a general measure of price inflation for the household sector as a whole. As part of this major review, the ABS published three Information Papers:

  • Issues to be Considered During the 13th Series Australian Consumer Price Index Review (cat. no. 6451.0).
  • Outcome of the 13th Series Australian Consumer Price Index Review (cat. no. 6453 .0).
  • Introduction of the 13th Series Australian Consumer Price Index (cat. no. 6454.0).

1.5 These papers describe the review process, the issues considered, the review outcomes and the reweighting exercise, and outline the changes made from the previous series.

1.6 More recently, the 14th series of the CPI was introduced in respect of the September quarter 2000, after a minor review completed early in 2000. The changes introduced in the 14th series were considered necessary to address issues arising from the introduction of The New Tax System (TNTS) on 1 July 2000. Once again, as part of the review process the ABS published Information Papers detailing the changes:
  • Price Indexes and The New Tax System (cat. no. 6425.0).
  • Introduction of the 14th Series Australian Consumer Price Index (cat. no. 6456.0).

1.7 Some of the material in these papers is now included in the various Chapters and an Appendix of this publication.

1.8 The ABS intends to periodically update this document. Therefore, the ABS would welcome reactions from users to the issues covered in this release. Comments should be provided, preferably in writing, to Steve Whennan, Assistant Director, Prices Branch, whose contact details are given below.

1.9 Readers who would like more information on the topics discussed in this publication should write to:

Steve Whennan,
Prices Branch
Australian Bureau of Statistics
Locked Bag 10
Belconnen, ACT 2616.
Tel: (02) 6252 6251
Fax: (02) 6252 7060
Email: steve.whennan@abs.gov.au

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