Measuring Durable Goods and Housing Prices in the CPI: An Empirical Assessment

Patrick Sabourin and Pierre Duguay
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Pierre Duguay: Bank of Canada, https://www.bankofcanada.ca/

Bank of Canada Review, 2015, vol. 2015, issue Autumn, 24-38

Abstract: While the CPI is the most commonly used measure to track inflation, it is not fully consistent with a true cost-of-living index (COLI). Although the official treatment of durable goods and housing in the CPI represents an acceptable compromise in the current environment of low and stable inflation, Sabourin and Duguay suggest that it would be worthwhile to consider treating housing and durables in the same way and bringing the actual CPI closer to a COLI. This could be accomplished by employing an enhanced user-cost approach to calculate the imputed cost of the services provided by the use of durable goods or housing.

Date: 2015
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