Chain-Weighted CPI

The Chain Weighted CPI (Consumer Price Index) is a calculated measurement for gauging inflation. Unlike the standard CPI, which measures consumer spending within a specifically designated basket of consumables, commodities, etc. which people purchase, the Chain Weighted CPI takes into account changes in spending habits which may affect spending choices that may not be presumably inflationary.

Changes in prices or selections of certain goods that can be substituted based on new data concerning health, technological breakthroughs, and cultural trends are factored in to generate a more accurate picture of consumer spending that can indicate if inflation is truly becoming manifest.

For example, increased use of computers and internet shopping at virtual stores such as Amazon.com can result in lower retail spending at brick and mortar stores, but is not necessarily an indication of reduced consumer spending. Increases in beef prices due to disease or reduced herd sizes could make families choose greater sized purchases of chicken or pork as substitutes for protein, but would not necessarily reflect inflation.