The Analytical Study of Administrative Consumer Price Index (CPI-A) in the Iranian Economy

The Vicissitudes in Consumer Price Index for essential goods and services bear de facto significant precedence for economic policy making. In this context, one may observe that the Administrative Consumer Price Index (CPI-A) is a special feature of CPI and virtually derived from it which per se constitute the selected tally of items in CPI, that the government (including the central and / or state government) shall render a substantial role in determining their prices Sine qua non. The generation of this indicator carries its eminence to surveil persistently the changes in the price trend of administrative items as well as, to embellish the impact of upheavals in administrative prices on CPI inflationary rate, Quid pro qua. In this paper, an attempt is made to build an Administrative Consumer Price Index (CPI-A). The results prima facie indicate that, the share of administrative items in the basket of consumer price index for goods and services of the Central Bank of the Islamic Republic of Iran in the base year of (2011=100) is about 28.8 percent, which is de jure more than the share of administrative items out of the Harmonized Index of Consumer Price Index (HICP) in the European Union, Ipso facto. Besides, the analysis of Changes in CPI-A Index during the period 2011-2017 show that the adjustments in prices of administrative items are proportional to the variations of market equilibrium prices, pro rata. Hence, we may construe that the government has been prosperous in the pricing of administrative items Afortiori. Although a fastidious postulation of this index can stipulate that in certain commodity groups i.e fuel, the government has not been auspicious in prising, Sui generis.