The course of prices is of interest both to Government and to citizens in a modern State. For a country as dependent as New Zealand on foreign trade, changes in import and export price levels are of crucial importance and have a direct bearing on the general prosperity of the economy. The level of internal retail prices is of importance as an indicator of changes in purchasing power. The retail price index is consequently a central piece of evidence when the Court of Arbitration is considering an application for a general wage order.
The importance of price movements in these and other fields led to an early development of official indices of retail, wholesale, export, and import price indices. These became available at the beginning of the century. No official price indices exist for other than the last few years of the nineteenth century, although a study on the course of prices from 1861–1910 by J. W. McIlraith gives valuable information on price movements during that period.