Break down of CPI.
Food - 27.52%
Housing - 22.92%
Clothing - 4.43%
Transportation - 18.03%
Education - 7.29%
Health - 3.05%
Misc - 16.75%
Now, the CPI uses the above weightage. But for any one person, the
breakdown is always different.
For example, housing cost does not matter to one who has already
bought a flat and would have to pay the bank at whatever cost
he/she bought the flat years ago. Similarly , one who has bought a
car some years back is not affected by any hikes in public
transportation but would look at rise in petrol or parking cost
seriously. Or in another case, a young single working adult would
not be bothered by education cost (unless he/she goes for further
studies) while a parent with several children going into university
would consider that a big expense. The other case would be a
retired person who may be more affected by health cost compared
with a adult in his twenties.
Thus, though CPI shows the prevailing cost of general population,
the problem is no one actually fits into that general model. Thus,
though it is good as an indicator, it is soulless to any individual
looking at it.