Defining an Outlet: What Characteristics are Truly Price

In order to pr oduce the Consumer Price Index, the Bureau of Labor Statistics c ollects its sample frame using a v ery narrow definition of the target sam ple unit – a retai l establishment or ‘outlet ’. Specifically, an outlet is de fined by the unique com bination of operating name, mode (e.g. internet, brick-and-mortar), and if brick-and-mortar, the exact physical address of the st ore. While it is nece ssary to deter mine a precis e location for pricing purposes, this definition of an outlet m ay not be ideal for sam pling. This paper examines whether or not the definition of an outlet can be broade ned in order to simplify data collectio n and to allocate the sample more efficiently , with out introd ucing bias or nonsampling error. Specifically , the effect of both location and fr anchise status on pric e change is modeled and evaluate d to determine which is m ore relevant in de fining an outlet.