The new Consumer Price Index Manual: Theory, 2025 provides a comprehensive overview of the conceptual issues that drive the methods and practices for constructing Consumer Price Indices (CPIs). It is an important guide for statistical offices and other agencies covering this topic. This manual is a companion to Consumer Price Index Manual: Concepts and Methods (2020).
The Consumer Price Index Manual: Theory, 2025 is the definitive global reference on the economic and statistical foundations of CPI measurement. Published jointly by six leading international organizations—including the International Monetary Fund, World Bank, Organization for Economic Cooperation and Development, United Nations, Eurostat, and International Labour Organization—it updates and expands the landmark 2004 edition to reflect two decades of advances in data, methods, and policy needs.
The manual covers many topics. It elaborates on the theories underlying the different practices currently in use, including the four main approaches to index number theory, calculation of elementary indices, quality adjustment methods, seasonal products, durable goods, and the treatment of owner-occupied housing. This publication also discusses the chain drift problem and multilateral indices and provides empirical examples, based on actual data, for upper-level index calculation formulae.
Why does this matter?
The CPI is more than just a measure of consumer prices—it is one of the most influential economic indicators in the world. It guides central banks in setting monetary policy, adjusts wages, pensions, and contracts for inflation, and shapes fiscal decisions that affect households, businesses, and governments alike. Given its impact, understanding how CPIs are constructed—and the theory behind them—is critical for ensuring their reliability, credibility, and international comparability.
This 2025 edition also highlights how new data sources (such as big data and scanner data) and evolving statistical techniques are transforming CPI compilation. By clarifying both the conceptual underpinnings and the practical implications, the manual equips statisticians, economists, policymakers, and data users with a deeper understanding of one of the most widely used statistics in the world.
In short, this is an essential guide for anyone who wants to look beyond the headlines about inflation numbers and understand the science—and the choices—behind them.
