The Researches on the Urban Consumer Price Index of Heilongjiang Province

Principal Component Analysis is a way to extract and simplify the original variables. The new variables do not only retain the essence reflected by the original variables, but also make the study better focus on the characteristics of the variables. This paper uses three principal components extracted from the eight CPI indicators, and the result of analysis shows that different living supplies have different impacts on CPI and CPI's general scores and ranks of ten cities in Heilongjiang province at January 2010. The analysis on the CPI plays an active role in formulating different regions in Heilongjiang economic policy and fiscal policy.