Differences of CPI and RPI
RPI includes the costs of housing (mortgage interest costs and council tax for example) while CPI does not. ... The RPI is an arithmetic mean – ie, the prices of everything to be included in it are simply added up and divided by the number of items. The CPI is a geometric mean.The first and foremost difference between CPI and RPI is that While the consumer picee index excludes mortgage interest payments, the retail price index includes the same. ... The measure, which calculates the variations in the prices paid by customer for the fixed basket of goods and ...Most of us believe that the main difference between RPI and CPI is the inclusion of certain housing costs (mortgage interest payments, council tax, buildings insurance etc) in the RPI. ... RPI is calculated using the 'arithmetic mean', whilst CPI uses the 'geometric mean'.
The main difference between these two methods is that the RPI is nearly always the same or higher than the CPI, in fact the RPI is usually around 1% higher than the CPI.