How does OPM compute price indexes?
Primary source
Verbatim text below is from the Electronic Code of Federal Regulations (eCFR), a public-domain U.S. government work. Always verify the current version with the eCFR before relying on it for any legal matter.
Full Text
Except for shelter and energy utilities, OPM averages by item the prices collected in each survey area. For the Washington, DC, area, OPM computes a simple average for each item based on the average prices from each DC survey area. On an item-by-item basis, OPM divides the COLA survey area average price by the DC average price and produces a price index.
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