Measuring Price Change

Price indices measure the rate of price change of goods and services over time, usually published as either monthly or quarterly change. They are official statistics published by National Statistics Offices.


About Price Indices

Watch the video 'Why Measure Prices?' below. The original news article can be found at Newshub.

There are some key terms you need to know.

Index Reference (Base) Period
This is the period in which the average price level of goods and services has an index number of either 100 or 1000 (depending on country). We are interested only in the relationship of the other index numbers to this period.

In 2014 the reference period for the Consumer Price Index (CPI) for these countries was as follows:

  • New Zealand: June 2006 quarter (Index number =1000).
  • Tonga: October 2010 month (Index number =100)
  • South Africa: December 2012 month (Index number =100)
  • United Kingdom: December 2005 month (Index number =100)


What is the reference period for the Consumer Price Index in your country?

Use the 'search' button below to find out. The link will take you to a Wikipedia page that contains an updated list of International Statistics Authorities. Once you have found your country you will need to search for the section on the CPI.

Index Number Series
A series of numbers measuring movement over time from the index reference period value. Here is an example on a time series of the Consumer Price Index from New Zealand.

Year mar jun sep dec ann
2014 1192
2013 1174 1176 1187 1188 1181.3
2012 1164 1168 1171 1169 1168
2011 1146 1157 1162 1158 1155.7
2010 1097 1099 1111 1137 1111
2009 1075 1081 1095 1093 1086
2008 1044 1061 1077 1072 1063.5
2007 1010 1020 1025 1037 1023
2006 985 1000 1007 1005 999.2
2005 953 962 973 979 966.7
2004 928 935 941 949 938.2
2003 913 913 918 924 917
2002 891 900 904 910 901.2
2001 869 876 881 886 878
2000 843 849 860 870 855.5

Percentage change
The change in an index number time series from one period to another expressed as a percentage of its value in the first period.

We can read the percentage change from the reference year directly from the index number series. For example, in the series the percentage change from June 2006 to September 2006 was 0.07%. Use the following exercises to check that you understand how to do this.


In the exercises that follow the final answers should be to one decimal place.

  • a. In the December 2013 quarter in New Zealand the value of the CPI was 1188. What is the growth in prices (percentage change) since June 2006?

The correct answer is: %

  • b. The value of the CPI was 1192 in the March 2014 quarter. What is the quarterly percentage change between the December 2013 and March 2014 quarters?

The correct answer is: %


If you don't know how to do this, or got a wrong answer view the section on Percentage Change.



The history of price indices varies from country to country and there are a number of factors that can affect prices.



Some of these factors impact across all groups of commodities, such as supply and demand, inflationary pressures, global financial crises, natural disasters and government goods and services taxes (GST). Other factors influence only specific commodities, such as Government regulations and subsidies, exchange rates, seasonal weather events and changing consumer preferences, including willingness to pay more for perceived superior goods.

New Zealand

The collection of retail price data began soon after the establishment of a Crown Colony in 1840 with the compilation of basic commodity prices sent back to London as part of the required collection of statistics across the British Empire. The establishment of an Arbitration Court in 1894 to set a fair wage for employees, prompted estimation of the basic living requirements of a working class family through the earliest price surveys, which charted price changes in 'staple' goods, such as food, rent, fuel, and light. Price indices have been published for hundred years (since 1914) with the modern expenditure based Consumer's Price Index being introduced in 1974 (Forbes et al, 2012).

You can use the International Statistics Authority list to find your country of interest.