What are some limitations of the CPI?
The CPI is subject to both limitations in application and limitations in measurement. Limitations of application The CPI may not be applicable to all population groups. For example, the CPI-U is designed to measure inflation for the U.S. urban population and thus may not accurately reflect the experience of people living in rural areas. Also, the CPI does not produce official estimates for the rate of inflation experienced by subgroups of the population, such as the elderly or the poor. (BLS does produce and release an experimental index for the elderly population; however, because of the significant limitations of this experimental index, it should be interpreted with caution.) As noted in the answer to question 18, the CPI cannot be used to measure differences in price levels or living costs between one place and another; it measures only time-to-time changes in each place.
