The type of database used for the measurement of commercial property price indexes (CPPIs) dictates the potential weaknesses in the resulting indexes and limitations of the methods available for measuring the indexes. Two major types of data are appraisals of the value of properties and recorded transaction prices. The former is based on expert judgement and may have problems of smoothing and lagging transaction prices. The latter is based on actual transactions and may have sample selectivity bias and limited sample sizes for these heterogeneous properties. These issues are examined.

The Retail Prices Index (RPI) is one of the UK’s most important macroeconomic indicators, as well as being used for indexation/adjustments for inflation to wages and benefits. This paper argues that the dynamic changes in product markets and consumers’ responses to price changes need to be incorporated into the RPI if it is to effectively measure changes in the cost of living. The quite positive and innovative work undertaken by the Office for National Statistics (ONS) is acknowledged. However, the basis of the RPI, in measuring the price changes of a matched, fixed basket of goods, is considered inappropriate to modern markets. Some proposals are made.