Theory | 2025 International Monetary Fund | International Labour OrganizationStatistical Office of the European Union (Eurostat)United Nations Economic Commission for EuropeOrganisation for Economic Co-operation and Development | The World Bank This page intentionally left blank CONSUMER PRICEINDEX MANUAL Theory | 2025 © 2025 International Labour Organization/International Monetary Fund/Organisation for EconomicCo-operation and Development/European Union/United Nations/The World Bank Cataloging-in-Publication DataIMF Library Names: International Labour Office, author. | Organisation for Economic Co-operation and Development,author. | European Union, author. | United Nations, author. | World Bank, author. | InternationalMonetary Fund, publisher.Title: Consumer price index manual : theory 2025.Description: Washington, DC : International Monetary Fund, 2025. | Includes bibliographical references.Identifiers: ISBN: 978-1-51355-960-5 (Paper)979-8-40026-995-0(ePub)979-8-40026-997-4(PDF)Subjects: LCSH: Consumer price indices—Methodology. | Price indices.Classification: LCC HB225.I58 2025 European Union Catalogue number: OA-09-24-336-EN-N (PDF) Disclaimer:For ILO, IMF, EU, UN, and World Bank: Prepared by staff of the ILO, IMF, EU, UN,and World Bank. The views expressed in this book belong to the authors. Nothing contained in thisbook should be reported as representing the view of the organizations, member governments, or anyother entity mentioned herein.For the OECD: This work is published under the responsibility of the Secretary-General of theOECD. The opinions expressed and arguments employed herein do not necessarily reflect theofficial views of the Member countries of the OECD.This document as well as any data and map included herein are without prejudice to the status of orsovereignty over any territory, to the delimitation of international frontiers and boundaries and tothe name of any territory, city, or area.The names and representation of countries and territories used in this joint publication follow thepractice of the IMF.Additional disclaimers for the OECD might apply. Please see https://www.oecd.org/termsandconditions/. Foreword............................................................................................................................................................ixPreface...............................................................................................................................................................xiAcknowledgments..............................................................................................................................................xiii The Basket, Axiomatic, and Stochastic Approaches to Index Number Theory.........................................1The Economic Approach to Index Number Theory...................................................................................2Elementary Indices......................................................................................................................................5The Chain Drift Problem and Multilateral Indices....................................................................................5Quality Adjustment Methods......................................................................................................................6Seasonal Products.......................................................................................................................................7The Treatment of Durable Goods and Owner-Occupied Housing.............................................................8Lowe, Young, and Superlative Indices: An Empirical Study for Denmark................................................9Conclusion...................................................................................................................................................10 2Basic Index Number Theory.........................................................................................................................11 Introduction................................................................................................................................................11The Decomposition of Value Aggregates and the Product Test.................................................................12The Laspeyres and Paasche Indices............................................................................................................13The Fisher Index as an Average of the Paasche and Laspeyres Indices......................................................14The Walsh Index and the Theory of the “Pure” Price Index......................................................................15The Lowe Index with Monthly Prices and Annual Base Year Quantities..................................................17The Young Index.........................................................................................................................................21Fixed-B