A Separate Consumer Price Index for the Elderly? Page: 3 of 6
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CRS-3
Table 1. Expenditures by Age, 2006
All Consumer 65 and Older 65 to 74 75 and Older
Units
Average annual $48,398 $35,058 $40,960 $28,904
Percent of Average Expenditures
Food 12.6 12.3 12.6 11.9
Alcoholic beverages 1.0 0.8 0.8 0.6
Shelter 20.0 17.9 16.9 19.4
Utilities 7.0 8.6 8.0 9.4
Household operations 2.0 2.1 1.8 2.5
Housekeeping supplies 1.3 1.6 1.6 1.5
Household furnishings 3.5 3.5 4.1 2.7
Apparel and services 3.9 2.7 3.0 2.2
Transportation 17.6 16.1 18.3 13.0
Health care 5.7 12.4 10.7 14.8
Entertainment 4.9 4.5 5.0 3.8
Personal care 1.2 1.4 1.3 1.5
Reading 0.2 0.4 0.3 0.4
Education 1.8 0.6 0.7 0.6
Tobacco 0.7 0.5 0.6 0.3
Miscellaneous 1.7 2.2 2.4 1.9
Cash contributions 3.9 7.4 5.2 10.6
Insurance and pensions 10.9 5.3 6.8 3.0
Source: Department of Labor, Bureau of Labor Statistics.
Health care costs have consistently risen more rapidly than the average price level.
Between December 1982 and December 2007, the CPI-W increased at an annual rate of
3.0% compared to a 5.4% rate of increase for the medical care component of the CPI-W.
Because, the elderly consume a greater than average share of a good whose price has
tended to rise faster than overall prices, the CPI-W may tend to understate the inflation
experience of the average elderly household.
Averages and Individuals
As noted above, the argument is often made, and not without justification, that the
CPI does not represent the average inflation experience of the elderly population. But,
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A Separate Consumer Price Index for the Elderly?, report, January 25, 2008; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc806289/m1/3/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.