Bank of Canada estimates measurement bias in CPI


An article published in the summer edition of the Bank of Canada Review on August 16, quantifies the measurement bias contained within the consumer prices index (CPI), saying this could be reduced by more frequent updates to the basket of goods.

The author, Patrick Sabourin, says the CPI is not a true cost-of-living index and may therefore not accurately represent changes in consumer welfare. The article finds that the annual CPI was subject to 0.5 percentage points of measurement bias from 2005

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