Basket
The fixed set of goods and services whose prices are collected each month to build a consumer price index — weighted by what households actually spend.
In plain words
A consumer price index doesn't try to track every price in the economy. Instead, statisticians select a representative basket — hundreds of specific goods and services that a typical household buys — and collect prices for them each month.
The basket is weighted: if a household spends 30% of its budget on housing, then housing has roughly 30% influence on the overall index. A 10% rise in rent matters ten times more than a 10% rise in postage stamps.
This weighting is what makes the index a meaningful average rather than a simple list of prices.
How the basket is built
Survey households
Thousands of households record every purchase they make for two weeks. These consumer expenditure surveys reveal what a typical family actually spends money on.
Calculate weights
Each category's share of total spending becomes its weight. If rent + utilities = 33% of spending, housing gets a weight of 0.33 in the index.
Collect prices monthly
Field agents visit shops, record online prices, and check rental listings each month. The weighted average change across all items = the inflation rate.
How weights affect the index
Adjust prices below to see how each category's weight determines its impact on the overall index.
Each +1% move in a category adds its weight × 1% to the overall rate. Housing is ~5× more impactful than energy.
Why weights matter — and where they fall short
The basket is designed to represent the average household. But no household is exactly average, which creates two well-known problems:
Different households, different inflation
A retired renter spends very differently from a young commuter. National CPI may show 3% while someone's personal inflation is 6% — because their basket is weighted heavily toward categories rising fastest.
Basket staleness
Weights are fixed for months or years while spending patterns shift. When petrol prices spiked in 2022, the basket still used 2019–20 weights — before people had cut back on driving.
Basket, COICOP, and the category hierarchy
The basket isn't a flat list of random items — it has a formal structure. Most countries use the COICOP classification (Classification of Individual Consumption by Purpose) to organize basket items into a consistent hierarchy:
This hierarchy means you can compare inflation across countries at the same level of detail — "food inflation in Germany vs France" uses the same COICOP 01 definition in both places.
How often is the basket updated?
US CPI-U
Weights updated every 2 years based on the Consumer Expenditure Survey. Source periods have a ~3-year lag.
BiennialEurostat HICP
Weights updated annually, using the most recent household expenditure data. More responsive to shifts in spending patterns.
AnnualUK CPI / CPIH
Weights and items revised annually in February, adding new products (e.g. streaming services) and dropping obsolete ones (e.g. fax machines).
AnnualCommon misreadings
"The basket tracks every price in the economy."
It tracks a representative sample — typically 80,000–100,000 price quotes per month for a few hundred item categories. The goal is statistical representativeness, not comprehensiveness.
"CPI measures how much prices rose for me."
It measures how much prices rose for a statistically average household. Your personal inflation depends on your own spending basket — which may look very different from the national average.
"If housing is 33% of the basket, rent must have risen 33%."
The weight is a share of spending, not a share of the price change. A 33% weight means housing accounts for a third of the typical budget — if rent rises 10%, it adds 3.3 percentage points to inflation (33% × 10% = 3.3 pts).
"The basket is the same everywhere."
Every country designs its own basket. US CPI has a large healthcare weight (7%+) because Americans pay out-of-pocket; European HICPs have a smaller healthcare weight because most costs are publicly funded. This makes cross-country comparisons tricky.
Frequently asked questions
What is in the CPI basket?
The basket typically includes food, clothing, housing costs, energy, transport, healthcare, education, recreation, and miscellaneous goods and services — weighted by how much households spend on each.
How often is the basket updated?
Most statistical offices update basket weights annually based on household expenditure surveys. The US BLS updates CPI-U weights every two years; Eurostat HICP weights are updated annually.