There are many different price indices that are constructed and used for different purposes. They can be constructed for particular categories of goods or regions, for example. If you listen to the news, you may hear references to the Producer Price Index or the Wholesale Price Index. Ultimately, the differences among different price indices simply come down to the bundle of goods that is chosen.
Figure 3.7 An Example of a Price Index shows an example of a very particular price index that was used by a supermarket in Thailand to advertise its prices. The store placed two supermarket carts at the entrance with the same bundle of goods in each. The one on the left, with the black label, showed the cost of this cartload of goods at the old prices. It used to cost 1,059.50 Thai baht (approximately US$28). The one on the right, with the red label, showed that the cost of this same bundle of goods was now 916.00 Thai baht. The reduction in price for the basket of goods was 143.50 Thai baht, or about 13.5 percent.
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