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Consumption baskets of Indian households: Comparing estimates from the CPI, CES and CPHS

Ananya Goyal (), Radhika Pandey () and Renuka Sane ()
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Ananya Goyal: National Institute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: A study of inflation requires a fixed consumption basket. The last publicly available data on household consumption baskets is from Consumer Expenditure Survey (CES) 2011-12. A more recent source of data has been the CMIE Consumer Pyramid Household Survey (CPHS). In this paper we compare the weights of various commodities in the Consumer Price Index (CPI) series with the CES 2011-12 and the CPHS 2019. We first document the methodology of construction of the Consumer Price Index (CPI) including details on commodity classification, reference and recall periods. We find that while CPI is based on CES 2011-12, CPI weights closely match those of CES 2011-12 only once the sub-group `Housing' is excluded from the total consumption expenses. For comparison with CPHS, we first map the CPHS commodities to CPI to make them comparable. We find the differences in some categories such as food, household goods and services are less than 2 percentage points. Differences in the shares of commodities such as transport and communication, health, education and intoxicants are larger.

Pages: 46
Date: 2021-08
New Economics Papers: this item is included in nep-cwa, nep-isf, nep-mac and nep-mon
Note: Working Paper 343, 2021
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