Consumption Baskets of Indian Households: Comparing Estimates From the CPI, CES and CPHS

44 Pages Posted: 30 Aug 2021

See all articles by Ananya Goyal

Ananya Goyal

National Institute of Public Finance and Policy

Radhika Pandey

National Institute of Public Finance and Policy

Renuka Sane

Trustbridge Rule of Law Foundation; National Institute of Public Finance and Policy

Date Written: 2021

Abstract

A study of inflation requires a fixed consumption basket. The last pub- licly available data on household consumption baskets is from Consumer Expenditure Survey (CES) 2011-12. A more recent source of data has been the CMIE Consumer Pyramid Household Survey (CPHS). In this paper we compare the weights of various commodities in the Consumer Price Index (CPI) series with the CES 2011-12 and the CPHS 2019. We first document the methodology of construction of the Consumer Price Index (CPI) includ- ing details on commodity classification, reference and recall periods. We find that while CPI is based on CES 2011-12, CPI weights closely match those of CES 2011-12 only once the sub-group ‘Housing’ is excluded from the total consumption expenses. For comparison with CPHS, we first map the CPHS commodities to CPI to make them comparable. We find the differences in some categories such as food, household goods and services are less than 2 percentage points. Differences in the shares of commodities such as transport and communication, health, education and intoxicants are larger.

Suggested Citation

Goyal, Ananya and Pandey, Radhika and Sane, Renuka, Consumption Baskets of Indian Households: Comparing Estimates From the CPI, CES and CPHS (2021). Available at SSRN: https://ssrn.com/abstract=3897519 or http://dx.doi.org/10.2139/ssrn.3897519

Ananya Goyal (Contact Author)

National Institute of Public Finance and Policy ( email )

18/2, Satsang Vihar Marg
New Delhi, 110067
India

Radhika Pandey

National Institute of Public Finance and Policy ( email )

18/2, Satsang Vihar Marg
New Delhi, 110067
India

Renuka Sane

Trustbridge Rule of Law Foundation ( email )

New Delhi
India

National Institute of Public Finance and Policy ( email )

18/2, Satsang Vihar Marg
New Delhi, 110067
India

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