3 ms·
RPI is the arithmetic mean, CPI the geometric mean (and some other smaller differences); the arithmetic-geometric mean inequality indicates the motivation for t
by jjgreen 4y ago
RPI is the arithmetic mean, CPI the geometric mean (and some other smaller differences); the arithmetic-geometric mean inequality indicates the motivation for the switchover.
https://en.wikipedia.org/wiki/Inequality_of_arithmetic_and_geometric_means https://en.wikipedia.org/wiki/Inequality_of_arithmetic_and_g...
- _benedict 4y agoRPI also includes some housing costs that are left out of CPI.
- jjgreen 4y agoIndeed, the relative importance of that and the AM/GM change ("formula effects") can be seen in this document from the UK Office of National Statistics https://web.archive.org/web/20101214034940/http://www.statistics.gov.uk/downloads/theme_economy/cpi-rpi-information-note.pdf https://web.archive.org/web/20101214034940/http://www.statis...