WPI vs CPI

Difference Between WPI vs CPI

Both wholesale price index (WPI) and the consumer price index (CPI) are the change in the price of various goods or services in the economy, where the wholesale price index measures the percentage change in the price in wholesale index, while consumer price index measures the percentage change in the price in retail market and hence it is more useful for consumers rather than businessman.

Inflation is a market situation in which the price of goods and services increases continuously over a period of time. Inflation is an important tool to control the flow of money in an economy and to measure inflation in an economy WPI and CPI are used.

WPI is Wholesale prices index it is used to measure average change in price in sale of goods or services in bulk quantity by the whole seller and CPI is consumer prices index which measures the change in the price in sale of goods or services in retail or it measures price of goods or services sell directly to consumers. Price Index means an index number which refers to the degree by which the price of goods or services is increased with reference to the base year.

In this article, we look at the differences between WPI vs CPI in detail –

What is the Wholesale Price Index (WPI)?

WPI is a Wholesale price index it is used to measure the average change in price in the sale of goods in bulk quantity by the whole seller. WPI also measures changes in commodity prices at the selected level before it reaches the final level that is the consumer. WPI is the first level where the first price increase in goods. WPI is published by the office of economic advisor that Ministry of Commerce and Industry. It is restricted to goods only and goods covered under WPI primarily are fuel, power, and manufacturing products. It releases on a weekly basis for primary articles, fuel, and power for rest items in publishing monthly. The base year for WPI is the financial year.

WPI-VS CPI

What is the Consumer Price Index (CPI)?

CPI is a consumer price index that measures the change in the price in the sale of goods or services in retail or it measures the price of goods or services sells directly to consumers. CPI is the final level where the price increase of goods or services. CPI is published by Central Statistic Office that Ministry of Statistic and Programme Implementation. It is both for goods and services. Goods and services covered under CPI are education, food, transport, communication, recreation, apparel, housing, and medical care. It releases on a monthly basis. The base year for CPI is the calendar year.

WPI vs CPI Infographics

Here we provide you with the top 11 difference between WPI vs CPI

WPI-VS CPI-info

WPI vs CPI – Key Differences

The key differences between WPI vs CPI are as follows –

  • Full form of WPI is the Wholesale Price Index and full form of CPI is Consumer Price Index
  • WPI is used to measure the average change in price in the sale of goods in bulk quantity by the whole seller whereas CPI measures the change in the price in the sale of goods or services in retail or directly to a consumer.
  • WPI is for only goods whereas CPI is for goods as well as services.
  • Inflation measure in the first stage in WPI and the final stage in CPI.
  • The price paid by manufacturer and whole seller in WPI and in CPI it is paid by the consumer.
  • Item covered in WPI is fuel, power and manufacturing products and in CPI education, food, transport, communication, recreation, apparel, housing, and medical care are covered.
  • WPI is used by very few countries whereas CPI is used by 157 countries.
  • Date of release for WPI is the weekly basis for primary articles, fuel, and power for rest items in publishing monthly whereas for CPI it publishes on a monthly basis.
  • WPI focuses on the prices of goods traded between business houses whereas CPI focuses on the prices of goods purchased by consumers.

WPI vs CPI Head to Head Difference

Let’s now look at the head to head difference between WPI vs CPI

Bases of Comparison – WPI vs CPI WPI CPI
Full-Form Wholesale Price Index Consumer Price Index
Meaning It is used to measure the average change in price in the sale of goods in bulk quantity by the whole seller. CPI is a consumer price index that measures the change in the price in the sale of goods or services in retail or directly to the consumer.
Published By WPI is published by the office of economic advisor that Ministry of Commerce and Industry. CPI is published by Central Statistic Office that Ministry of Statistic and Programme Implementation.
Measured Price By It is restricted to goods only. It is both for goods and services.
Measurement of Inflation WPI measures inflation in the first stage. WPI measures inflation in the final stage.
Prices Bear By Prices bear by manufacturer and whole seller. Prices bear by the consumer.
Number of items covered 697 448 for rural and 460 for urban.
Goods and Services Covered Fuel, power and manufacturing products. CPI covers education, food, transport, communication, recreation, apparel, housing, and medical care.
Base/ Reference Year The Financial Year The Calendar Year
Used by Used by a few countries. Used by 157 countries.
Date of Released  It releases on a weekly basis for primary articles, fuel, and power for rest items in publishing monthly. It releases on a monthly basis.

Conclusion

Both WPI and CPI are used to calculate the inflation rate. WPI is used to measure the average change in price in the sale of goods in bulk quantity by the whole seller and CPI is used to measure the change in the price in the sale of goods or services in retail or directly to a consumer. Earlier on WPI was only in use but as the government was unable to know its impact on common people as common people do transact wholesale transaction CPI was introduced. WPI tells about inflation at the business level and CPI tells about inflation at the consumer level.

Mainly WPI focus on prices of goods traded between business houses whereas CPI focuses on prices of goods purchased by consumers. As CPI provides more clarity about inflation and its economy on the overall economy hence CPI is widely used for calculating inflation as compared to WPI. So, monetary policy primarily focuses on price stability and that can be achieved by controlling inflation and inflation can be track and measured by WPI and CPI.

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