What does the Consumer Value Index (CVI) represent?

The Consumer Value Index (CVI) is an important metric in understanding the economic value provided to consumers in relation to the pricing of goods or services. Specifically, the CVI is calculated by taking the wholesale amount of merchandise and dividing it by the retail amount. This ratio provides insight into the value consumers receive when purchasing a product as compared to what it costs to acquire that product at wholesale.

In essence, this calculation reflects how much value is generated for each retail dollar spent, which is crucial for assessing market competitiveness and consumer satisfaction. A higher CVI indicates that consumers are receiving more value for their money, while a lower CVI suggests less value. This understanding helps businesses strategize pricing and improve their offerings to better meet consumer expectations.