|Title||What is a Consumer Price Index (CPI)?|
A CPI measures average changes in prices paid by all consumers for purchases of goods and services. It is not intended to measure price changes affecting particular groups or individuals but rather reflects average consumption pattern for all households in Korea.
A CPI represents an overall picture of price movement of 481 different goods such as food and beverage, medicine and services such as after-school tutoring, housing rent, bus fare and barber fee that are purchased in everyday life.
Instead of accounting for extra expenditure out of living cost such as purchase of luxury items based on income level, quantitative and qualitative increase in items purchased due to growing up of children or additional number of family members, a CPI excludes these portions and only measures price changes in the index.