Few government statistics have generated as much debate over the past century as price indexes. Conceived as tools for settling wage disputes, price indexes developed into cost-of-living escalators and crucial economic indicators.
Nearly constant criticism, initially from trade unions and later from economists, prodded government agencies to improve price indexes by accounting for factors such as consumer substitution, quality change and new products.
Today’s price indexes are far more accurate measures of consumer inflation than early efforts to track price changes. But technical issues still dog economists and statisticians striving to further improve price indexes.