Which of the following is a characteristic of RPI compared to CPI?

The correct characteristic of the Retail Price Index (RPI) compared to the Consumer Price Index (CPI) is that RPI includes housing costs. This is crucial as RPI measures the cost of a representative basket of retail goods and services, and it takes into account expenses associated with home ownership, such as mortgage interest payments and property costs. This aspect makes RPI broader in scope regarding housing-related expenses compared to CPI, which focuses more on the prices consumers pay for goods and services without incorporating certain housing costs.

While the other options provide various statements regarding RPI and CPI, they do not accurately reflect the fundamental differences between the two indices. For example, the weighted average methodology differs; RPI typically employs an arithmetic mean rather than a geometric one. Moreover, while CPI and RPI can yield different values, it is misleading to assert that CPI always has higher readings than RPI, as this can vary depending on economic conditions. Lastly, not including student accommodation specifically relates to other housing metrics, but CPI still considers a range of housing-related costs separate from student accommodations directly. Thus, RPI’s inclusion of housing costs distinctly differentiates it from CPI.