Paul Lewis
speaker
150 appearances
6 recordings
1 series
first heard Apr 2011
last heard Jan 2015
Paul Lewis’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
You add up all the prices for bananas and divide by however many there are.
matched
But the CPI uses the geometric mean.
matched
You multiply all the prices together and then you take the nth root, where n is the number of items.
matched
That method takes account of the fact that
matched
If the price of bananas rises, we buy fewer of them, or we switch from organic to an own-brand bunch.
matched
In other words, as inflation bites, we keep the share of what we spend on bananas the same.
matched
And it's the different maths which accounts for most of the difference between the two indices.
matched
This month, for example, the RPI was 5.3% and the CPI 4%.
matched
And that difference of 1.3 percentage points was made up of 1 from the formula and just 0.3 from housing costs.
matched
And because the geometric mean is always less than or equal to the arithmetic mean, CPI is almost always lower than RPI.
matched
Showing 141–150 of 150 · page 8 of 8
← Previous