This article reviews economic and marketing validity issues of the Consumer Price Index
(CPI) and the CPI Food at Home market basket as computed and reported by the Bureau of Labor
Statistics’ (BLS). It identifies a major controversy that has plagued the CPI for more than 70 years
as well as addresses economic as well as marketing issues which explain the CPI’s shortcomings.
Specifically, it reviews the CPI literature for both food and non food components and reviews the
major issues surrounding the CPI’s computation methodology used by the BLS, and puts forth
recent recommendations that have greatly helped reduce many of the CPI’s shortcomings.