In UW Profiles, under the Research category, run analysis on both inflation and non-inflation adjusted expenditure data.
UW Profiles Examples:
What does this mean?
Inflation means the price for goods and services are going up. “Inflation adjusted” is sometimes referred to as “real expenses.” “Non-inflation adjusted” is sometimes referred to as “nominal expenses.” So when you see “inflation adjusted” or “non-inflation adjusted” you know that either inflation has or has not been applied to the data.
The way inflation is applied to the data is by including Consumer Price Index (CPI) data. The CPI measures the change in prices of a predetermined “market basket” of goods and services over time.
Why is this important?
By looking at data over time that includes inflation, you are able to compare with accuracy. By not including inflation adjustments, the data skews making trends appear when they are not real.
Where does this data come from?
Example – How CPI is calculated
For an annual (fiscal year) analysis:
- Annual Average: Adjust a nominal value for inflation by first taking the average of each of the CPI values for each month in the Fiscal Year.
- Inflation Adjustment: Divide the CPI average for the period the transaction occurred (e.g. 2010) by the CPI value for the current time (e.g. 2018).