The Consumer Price Index (CPI) and Your Experience of Price Change
Catalogue number: Catalogue number: 11-629-x
Issue number: 2016002
January 2016
The Consumer Price Index (CPI) and Your Experience of Price Change - Transcript
Description of visuals
The Consumer Price Index, CPI for short, is one of the principal measures of inflation in Canada.
(Balloons float upwards, pulling a dollar sign with them.)
It tracks the price change of goods and services for all consumers across the country.
(A line graph is drawn, with a blank axis.)
Some have asked why the index doesn't appear to reflect their own consumer experiences.
(The line graph transforms to show a map of Canada. The map then transforms into a question mark.)
It may seem like the prices you see on grocery store shelves or at the pumps are not reflected in the CPI every month but, in fact, they are.
(A street is shown with a grocery store and a gas station.)
To see why, let's look at two Canadian consumers who are closely related but very different Izzy, and her eldest son, Joanasie.
(Two cartoon characters appear, one an older woman and the other a younger man.)
Joe and his mom are close, but there's one issue that they just don't see eye to eye on: food.
(A house on a street is shown, with Izzy waiting in front of it and Joe walking toward her with a suitcase in hand.)
Joe always loved to eat meat, especially his mother's beef stroganoff. He loved it so much in fact, that Izzy grew tired of it and became a vegetarian when Joe left home.
(Inside the house, Joe is sitting at the table in the kitchen. The scene transforms from time when Joe was a child to the current time, when he is an adult.)
During Joe's last visit, Izzy thought she might curb his carnivorous tendencies by making him one of her favourite veggie dishes: spinach tofu curry. It didn't work.
(While Joe sits at the table, a panel appears with an image of the plate of spinach tofu curry.)
Despite being a habitual plate-cleaner, Joe didn't even eat the tofu. As he prodded the little white cubes with his fork, he dreamt of steaks, roasts, and hamburgers.
(While Joe sits at the table, a thought cloud appears with pictures of steaks, roasts and hamburgers.)
Joe's choice of meat over tofu is one of the preferences that shape him as a consumer, and he is a very different consumer than his mom. Personal preference and taste as well as many other factors, such as household composition, lifestyle and mobility all have an influence on decisions that consumers make.
(Two profiles of Izzy and Joe as consumers appear. They read as follows: Izzy – Vegetarian, Etobicoke, Retired, Single. Joe – Eats meat, Iqaluit, Firefighter, Married.)
Since the CPI is an average measure of price change, it takes into account the big picture of consumer spending across Canada.
(The following text is shown: "CPI: Average measure of price change.")
It includes both Izzy's tofu and Joe's beef, as well as a massive list of other items that some Canadians buy frequently and others simply have no use for.
(A long grocery list appears and scrolls upward. "Tofu" and "Beef" are listed near the top and circled.)
This big picture of consumer spending may not match with the experience of you or your household. This is because your experience of price change is limited to the relatively small list of things that you buy often.
(A picture of Joe and his mom in a picture frame on the wall in the kitchen is shown. Then, the camera moves to a short grocery list that is on the fridge in the kitchen.)
For example, for Joe's next visit, Izzy made another trip to the grocery store during which she unhappily noticed that her favorite tofu brand had increased in price by 50 cents.
(Izzy is shown in a grocery store, looking at the tofu with a surprised expression on her face.)
Remembering Joe's last visit, she made note of a sale on pot roasts before she left the store. She figured she could make her beef stroganoff for Joe since he didn't seem thrilled with her veggie dishes.
(A sign is shown that reads "Sale: Beef!")
While the measly 50-cent increase in tofu had thrown Izzy for a loop, she didn't even notice that the price of beef had increased by a hearty 20% in the past year.
(Two panels from a flyer appear. One shows a block of tofu with a price tag reading "up 50 cents(50%)," while the other shows a beef roast with a price tag that reads "up four dollars (20%)")
Most consumers, like Izzy, attach greater importance to price changes in goods and services that they buy frequently over more occasional purchases.
(The tofu grows in size to indicate that it is a frequent purchase, and the beef roast is indicated to be a more occasional purchase)
However, the CPI measures price change in all goods and services.
(The camera moves out to show that the tofu and beef roast are part of a larger flyer that contains all sorts of items)
In doing so, we can draw an accurate picture of inflation and price change in the country. Changes in common items like milk or gasolineare included in the CPI of course, however, the index also includes items that are purchased less frequently, such as furniture, home electronics and clothing.
(As the camera pans over the flyer, panels indicating milk and gasoline appear, followed by panels with images of furniture, home electronics and clothing)
Joe, for example, hates shopping for clothing, but he did buy a new pair of jeans for his next visit to his mom's place - a pair with very deep pockets.
(Joe is shown in a clothing store looking at an outfit. He is then shown in the kitchen of his mother's house wearing the outfit. A close-up on his jeans pocket shows that he is clandestinely pocketing a cube of tofu)
Visit the website for more information about Canada's Consumer Price Index.
(The website is shown, www.statcan.gc.ca, followed by the text "You may also be interested in…" and screenshots of two videos, one on Gross Domestic Product and the other an earlier video concerning the Consumer Price Index. The heading "For More Videos" is shown with a subscribe button. The heading "Follow us" is also shown with icons for Facebook: facebook.com/statisticscanada and Twitter: @StatCan_eng). The 'Canada' wordmark is shown.)
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