Number: RS20060
Title: A Separate Consumer Price Index for the Elderly?
Authors: Brian W. Cashell, Government and Finance Division 
Abstract: There is concern that the CPI-W may not accurately reflect the inflation experience of the elderly population. On average, the elderly spend relatively more on health care, whose price has tended to rise faster than overall prices. Other things being equal, that would suggest that the CPI-W tends to understate the inflation experience of the average elderly household. The Bureau of Labor Statistics (BLS) has developed an experimental price index to track inflation for the population aged 62 and older. The average annual rate of change between December 1982 and December 2007 for the experimental index was 3.3%; over the same period, the CPI-W rose at a 3.0% rate. No inflation measure for a large population group will exactly account for the experience of each member of that group. Differences in spending patterns, in combination with different rates of price change for all of the various goods and services included in the CPI, mean that individual inflation rate experiences may range significantly above or below the measured average
Pages: 6
Date: January 25, 2008