Synopsis

This unit looks at a wide variety of ways of comparing prices and the construction of a price index. You will also look at the Retail Price Index (RPI) and the Consumer Price Index (CPI), indices used by the UK Government to calculate the percentage by which prices in general have risen over any given period. You wil also look at the important statistical and mathematical ideas that contribute to the construction of a price index.

Table of Contents

Introduction
Learning outcomes
1.1: Introduction
1.2: Are we getting better off?
1.2.1: Using your loaf
1.2.2: The price of a loaf these days
1.2.3: A typical shopping basket
1.3: A statistical interlude—averages
1.3.1: The mean and the median
1.3.2: The mean
1.3.3: The median
1.3.4: Calculating means using frequencies and calculating weighted means
1.3.5: Generalising the formula for the mean household size
1.3.6: Weighted mean
1.4: Price ratios and price indices
1.4.1: Price ratios
1.4.2: Price indices
1.4.3: A price index for the shopping basket
1.5: The UK Government price indices
1.5.1: What are the CPI and RPI?
1.5.2: Calculating the price indices
1.6: Using the price indices
1.7: Some mathematical themes
1.7.1:Relative and absolute comparisons
1.7.2: Ratio and proportion
1.7.3 What is proportion?
1.7.4: Is a picture worth a thousand words?
1.8: Summary
Next steps
Acknowledgements

 

---