How are low income household negatively affected by weighting of items in the consumer price index basket?

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Social Studies

Tiara Aguilar

10 June, 18:54

How are low income household negatively affected by weighting of items in the consumer price index basket?

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Daniela Barajas · Answer 1

The CPI market basket is drawn from consumers who respond with diaries of products bought over a two week period. Low-income households do not participate at such high levels of reporting and are therefore under reported.