Engineering Economic Analysis

15

o

1973 1976 1979 1982 1985 1988 1994 1997 2000 2002

Year

1991

FIGURE 14-5 CPI Inflation Rate over 30 years (1973-2002).

Composite indexes can be used in much the same way as commodity-specificindexes,

described earlier. That is, we can pick a single value from the table if we are interested in

measuring the historic price for a single year, or we can calculate anaverage inflation rate
oraverage rate of price increaseas measured by the index over a time period extending
several years.

PriceChangewith Indexes^455

TABLE14-2 CPllndex Values and Yearly Percentage Increases,

1973-2002

Year CPIValue* CPllncrease Year CPIValue. CPllncrease

1973 44.4 6.2% 1988 118.3 4.1%

1974 49.3 11.0 1989 124.0 4.8

1975 53.8 9.1 1990 130.7 5.4

1976 56.9 5.8 1991 136.2 4.2

1977 60.6 6.5 1992 140.3 3.0

1978 65.2 7.6 (^1993) 144.5 3.0
1979 72.6 11.3 1994 148.2 2.6
1980 82.4 13.5 1995 152.4 2.8
1981 90.9 10.3 1996 156.9 2.9
1982 96.5 6.2 1997 160.5 2.3
1983 99.6 3.2 1998 163.0 1.6
(^1984) 103.9 4.3 1999 166.6 2.2
1985 107.6 3.6 2000 172.2 3.4
1986 109.6 1.9 2001 177.1 2.8
1987 113.6 3.6 2002 179.1 1.6
*Referencebase: 1982-1984=100.