|Title||What are the weights used on products in the Consumer Price Survey, and how are they determined?|
When aggregating price changes of products covered in the CPI, the different effects of each product on consumption activity cannot be captured by simply averaging out the prices. For example, a 10% rise in the price of rice and a 10% rise in electricity cost would not have the same effect on household consumption. Hence, by using the share of each product in household consumption expenditure as weights and then by computing weighted average of the prices, we apply the effect proportional to consumption expenditure size to the CPI.
The weights for each product is computed by the sales and production value of each product and through special surveys based on consumption expenditure item in the HIES. However, as each product represents price trend of the product category, comparing the weights between products is not meaningful.