|Cost of living index|
An index of the cost of maintaining a given standard of living. This is found by measuring the total cost of some given basket of goods and services. The composition of the basket has to be changed periodically, take account of both changes in the proportions of income spent on different goods as relative prices change, and changes in the types of goods and services purchased because of changes in tastes or technology. The main UK cost of living index is the retail price index.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|