How is the C-CPI-U constructed and how is it different from the CPI-U and CPI-W?
Both the CPI-U and C-CPI-U are indexes designed to measure price changes faced by urban consumers, while the CPI-W is designed to measure price changes faced by urban wage earners and clerical workers. Population coverage is the only difference between the CPI-U and CPI-W. The C-CPI-U is further distinguished from the CPI-U and CPI-W based upon the expenditure weights and formula used to produce aggregate measures of price change. As background, all three of the CPI indexes are built in two stages. In the first stage, prices for each of the 8,018 item-area combinations (211 item categories X 38 geographic areas) are averaged together to form 8,018 basic indexes. This stage is often referred to as “lower-level aggregation” as it involves averaging the prices within item-area groups. For example, price changes for apples within Chicago are averaged together to produce the Chicago-apples index. In 1999, the BLS introduced a geometric mean formula for averaging prices within most of these
