CPI, is the one thing I thought I knew about, but - and this is maybe getting a bit technical - what if the prices of the goods basket were from different stores, or the store they got it from went out of business and they had to use another store - this in itself could skew the data.
I suspect that we just have to presume that whoever composes the index adjusts it for these variables so they are mitigated.
The other thing I was thinking was, what if a component of the index, such as oil price had the capacity to affect other components.
The price of coca cola can't affect oil, but the price of oil can affect other components - such as coca cola.
Is this affect discounted prior to the index or does it have to be crunched post index release?
I suspect that we just have to presume that whoever composes the index adjusts it for these variables so they are mitigated.
The other thing I was thinking was, what if a component of the index, such as oil price had the capacity to affect other components.
The price of coca cola can't affect oil, but the price of oil can affect other components - such as coca cola.
Is this affect discounted prior to the index or does it have to be crunched post index release?