Illinois Municipal Price Index (MPI)
Northern Illinois University Center for Government Studies
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The Illinois Municipal Price Index (MPI) was developed by the Illinois Institute for Rural Affairs at Western Illinois and is updated annually by Northern Illinois University's Center for Governmental Studies staff with assistance from the Illinois Municipal League. The MPI is designed to measure the increases in prices of goods and services purchased by Illinois municipalities. Comparisons of the price and wage increases are shown for city expenditures as a whole and by major department so that users can determine the extent to which expenditures, in constant dollars, have changed through time. The MPI differs from other indices such as the Consumer Price Index (CPI) or the Producer Price Index (PPI) in that it is constructed based on purchasing patterns of cities rather than consumers or businesses. The MPI is a weighted aggregate of price relatives which means that the price or wage increases are weighted by the relative importance that each represents in the city or departmental budget.