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Consumer Price Index: Update of Boskin Commissionís Estimate of Bias
Nancy R. Kingsbury (au). The Consumer Price Index (CPI) is the principal measure of trends in consumer prices & inflation. The CPI affects Federal revenues & spending because automatic cost-of-living adjustments to Fed. tax brackets & many Federal benefit programs are calculated based on changes in the CPI. In Dec. 1996, the Boskin Commission (BC) issued a report estimating that the CPI overstates changes in the cost of living by 1.1% points annually. This report identifies the changes made to the CPI since Dec. 1996, & presents the opinions of the 5 former BC members on how much of the bias in the CPI that the BC estimated in its report remains after recent changes to the CPI.
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