The consumer price index is a measure which is used to track the change in prices for common household goods over time. That is, researchers determine the cost of a particular set of goods and services every year. This cost is then compared against the cost of goods and services from other years.
Constant dollars are dollars which are adjusted for inflation.
The Bureau of Labor Statistics has developed a CPI calculator that automates this second calculation and illustrates the process of inflating and deflating dollar amounts from year to year. The actual values of the CPI are listed below. Two of these CPIs are used most frequently. Because the asset value of houses was growing so much faster than the consumption value, the inflation rate that included asset values was excessive. In 1983 the Bureau of Labor Statistics began using a rental equivalence approach to measure the value of housing.