Economics · Year 11

Active learning ideas

Measuring Inflation: CPI and RPI

Active learning helps students grasp inflation measurement because comparing real price changes and debating index choices makes abstract formulas concrete. Students often struggle to see why two indices can show different inflation rates, so hands-on calculations and scenario-based debates clarify these distinctions.

• National Curriculum Attainment Targets
• GCSE: Economics - Inflation
• GCSE: Economics - Economic Objectives

• 35–50 min
• Pairs → Whole Class
• 4 activities

Activity 01

• Case Study Analysis
• 45 min · Pairs

Price Survey: Building a Mini-CPI

Provide students with a simplified basket of 10 common items. In pairs, they survey local shops or websites for current and past prices, calculate percentage changes, and construct a basic CPI. Groups then compare results to official data.

Differentiate between the Consumer Price Index (CPI) and the Retail Price Index (RPI).

Facilitation Tip

During the Price Survey activity, assign each small group a category of goods to research, ensuring they collect prices from multiple local retailers to capture real-world variability.

What to look for

Present students with two hypothetical 'baskets of goods', one from 2010 and one from 2023, with prices for each item. Ask them to calculate the percentage change in cost for each basket and identify which index, CPI or RPI, might be more affected by a specific price change, explaining their reasoning.

• Analyze
• Evaluate
• Create
• Decision-Making
• Self-Management

Activity 02

• Case Study Analysis
• 50 min · Small Groups

Debate Stations: CPI vs RPI Scenarios

Set up stations with case studies on housing costs, pensioner impacts, or formula differences. Small groups prepare arguments for using CPI or RPI in policy, then rotate to defend or challenge positions. Conclude with whole-class vote.

Analyze the challenges in accurately measuring inflation over time.

Facilitation Tip

In Debate Stations, provide scenario cards that highlight specific policy contexts, forcing students to defend their choice of index using evidence from their calculations.

What to look for

Pose the question: 'If the government wants to accurately reflect the spending of all UK households, including pensioners and those with significant housing costs, which index, CPI or RPI, would be a better starting point, and why?' Facilitate a class debate on the strengths and weaknesses of each.

• Analyze
• Evaluate
• Create
• Decision-Making
• Self-Management

Activity 03

• Case Study Analysis
• 40 min · Small Groups

Basket Update Simulation

Distribute cards showing new goods, quality changes, or spending shifts. In small groups, students vote on basket revisions, recalculate sample inflation rates, and discuss effects on index accuracy.

Explain how changes in the basket of goods affect inflation calculations.

Facilitation Tip

During the Basket Update Simulation, challenge groups to justify their proposed basket changes by referencing ONS data on changing consumer habits, such as the rise of streaming services over DVD rentals.

What to look for

Ask students to write down one key difference between CPI and RPI and one challenge in measuring inflation accurately. Collect these as students leave to gauge immediate understanding.

• Analyze
• Evaluate
• Create
• Decision-Making
• Self-Management

Activity 04

• Case Study Analysis
• 35 min · Individual

Data Analysis: Historical Trends

Share ONS CPI and RPI charts from the past decade. Individually, students identify divergences, annotate causes like basket changes, then share findings in pairs for class discussion.

Differentiate between the Consumer Price Index (CPI) and the Retail Price Index (RPI).

Facilitation Tip

In the Historical Trends activity, have students plot CPI and RPI data on the same graph using a shared timeframe, prompting them to analyze the visual gaps between the two indices.

What to look for

Present students with two hypothetical 'baskets of goods', one from 2010 and one from 2023, with prices for each item. Ask them to calculate the percentage change in cost for each basket and identify which index, CPI or RPI, might be more affected by a specific price change, explaining their reasoning.

• Analyze
• Evaluate
• Create
• Decision-Making
• Self-Management

A few notes on teaching this unit

Teachers should emphasize the purpose of inflation measurement before diving into formulas, connecting the topic to real-life decisions like wage negotiations or pension adjustments. Avoid starting with the mathematical details; instead, build intuition with relatable examples, such as comparing the cost of a school lunch in 2010 versus 2023. Research shows students retain concepts better when they first engage with the 'why' before the 'how'.

Successful learning looks like students confidently calculating inflation rates using both CPI and RPI formulas and explaining why results differ. They should articulate how basket updates and housing costs influence index values and debate which index better reflects a given economic scenario.

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Watch Out for These Misconceptions

• During Price Survey: Building a Mini-CPI, students may assume the basket of goods should include the same items year after year.

  During Price Survey: Building a Mini-CPI, redirect groups to consider how spending habits have evolved, such as the replacement of DVDs with streaming subscriptions, and require them to justify their updated basket choices using local or national data.

• During Basket Update Simulation, students may believe the basket update process is arbitrary and not tied to economic reality.

  During Basket Update Simulation, provide ONS reports on changing household spending patterns and require groups to cite specific trends, such as the decline in tobacco spending or the rise in online shopping, to ground their updates in evidence.

• During Data Analysis: Historical Trends, students may think inflation indices capture the full cost-of-living experience for every household.

  During Data Analysis: Historical Trends, have students compare CPI and RPI trends with data on regional price variations or income inequality, then facilitate a peer discussion to highlight which groups might be underrepresented in the averages.

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Methods used in this brief

• Case Study Analysis