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Budget and Spending: Developing a Consumer Price Index for the Elderly

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Report Type Reports and Testimonies
Report Date June 29, 1987
Report No. T-GGD-87-22
Subject
Summary:

GAO discussed whether movements in the general consumer price index (CPI) accurately reflect trends in the prices that the elderly pay. GAO previously reported that: (1) differences in geographic distribution of retirees and the places where they shop, compared to the general public, could cause a difference in retirees' CPI; and (2) price increases that were reweighted to reflect the budgets of the elderly were not substantially different from increases in the general CPI. GAO concluded that: (1) the evidence does not justify creating a special CPI for retirees of a similar quality to that of the general CPI; and (2) future price changes might change significantly to justify a fully developed CPI for retirees. The Bureau of Labor Statistics disagreed with the findings and the GAO recommendation to annually compute an experimental retirees' index. However, GAO believes that the experimental index is a low-cost tool for monitoring the relationship between the general index and a retirees' index to determine if there is a need for a fully developed retirees' CPI.

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