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Difference Between CPI and CPIX

CPI vs CPIX

CPI and CPIX are major economic indicators. Though these two are used for measuring inflation, they are different in many ways. In terms of usage, the Consumer Price Index is more commonly used and broadly known.

CPI or Consumer Price Index measure is a primary indexing method. It is a measure of the changes in the purchasing power of an average family. On the other hand, CPIX is the Consumer Price Index excluding mortgage costs.

In contrary to the CPI, the CPIX includes the cost of consuming shelter services that is provided by a house. Unlike the Consumer Price Index, the CPIX does not include investment aspects of ownership of the house. The CPIX includes a rent calculation instead of the investment aspects.

In a nutshell, the CPIX is an index that excludes the investment aspects of home ownership. Instead it uses a rent calculation.

The Consumer Price Index inflation rate is determined by comparing the CPI of a current month with the CPI of the corresponding month during the previous year.

CPIX, which can be called as a derivation from Consumer Price Index, can be termed as CPI minus mortgage rates. The CPIX includes all services and goods that are included in the CPI basket except for the interest rate of mortgages.

It can also be noted that CPIX is more used in indicating inflation rates in the Metropolitan and Urban areas. On the other hand, Consumer Price Index takes into account all areas.

When talking of the term CPIX, South Africa comes to the mind as it is here where the term is widely used as an economic indicator.

Summary

1. CPI or Consumer Price Index measure is a primary indexing method. CPIX, which can be called as a derivation from Consumer Price Index, can be termed as CPI minus mortgage rates.
2. The Consumer Price Index inflation rate is determined by comparing the CPI of a current month with the CPI of the corresponding month during the previous year.
3. On the other hand, CPIX is the Consumer Price Index excluding mortgage costs.
4. Unlike the Consumer Price Index, the CPIX does not include the investment aspects of ownership of the house. The CPIX includes a rent calculation instead of the investment aspects.
5. CPIX is used in indicating inflation rates in the Metropolitan and Urban areas. On the other hand, Consumer Price Index takes into account all areas.


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