<p>Without anything better than a CPI, a CPI would approximate it. That said, I don't think it would be accurate. A better gauge would be a measure of the cost of living for the effected people. Vehicle maintenance and the like would be much higher than a typical person.</p>

CC BY-SA 3.0
2015-02-04T01:48:31.537Z
As an academic exercise though, I think using CPI would be OK.
Jamzy
CC BY-SA 3.0
2015-02-04T01:47:40.360Z
2015-02-04T01:47:40.360Z
Jamzy
<p>There was a recent rollback in the fare rate in our city from 9.50 pesos to 6.50 pesos because of the decrease in the price of gasoline. The fare rate here is pegged to the prevailing price of gasoline as stipulated in a city ordinance crafted in 2007. Due to the decrease in the fare rate, public transportation drivers held a strike arguing that 6.50 pesos was too low considering the prices of necessities and rent for their vehicles have not declined.</p>

<p>My question is will it be sufficient to use the percentage change in CPI between 2015 and 2007 multiplied by 2007 fare rate to arrive at a new fare rate for 2015? I'm thinking since CPI already takes oil and gasoline prices into account, we don't have to factor in percent change in gasoline prices.</p>

<p>I plan to pose this problem in my economics class as a practical application of what we learned about inflation and the CPI.</p>

<p>Thank you for taking the time to read this!</p>

<inflation>
Can I use percentage change in CPI to calculate fare rate schedule?
Soo
# Can I use percentage change in CPI to calculate fare rate schedule?

(Asked by: username_0 on 2015-01-28)

There was a recent rollback in the fare rate in our city from 9.50 pesos to 6.50 pesos because of the decrease in the price of gasoline. The fare rate here is pegged to the prevailing price of gasoline as stipulated in a city ordinance crafted in 2007. Due to the decrease in the fare rate, public transportation drivers held a strike arguing that 6.50 pesos was too low considering the prices of necessities and rent for their vehicles have not declined.

My question is will it be sufficient to use the percentage change in CPI between 2015 and 2007 multiplied by 2007 fare rate to arrive at a new fare rate for 2015? I'm thinking since CPI already takes oil and gasoline prices into account, we don't have to factor in percent change in gasoline prices.

I plan to pose this problem in my economics class as a practical application of what we learned about inflation and the CPI.

Thank you for taking the time to read this!

**Tags:** inflation

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## 1 answers

### Answer by username_1 on 2015-02-04. Score: 1 | Accepted answer

Without anything better than a CPI, a CPI would approximate it. That said, I don't think it would be accurate. A better gauge would be a measure of the cost of living for the effected people. Vehicle maintenance and the like would be much higher than a typical person.

> **Comments:**
> **username_1**: As an academic exercise though, I think using CPI would be OK.  

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