taxes, donation period. Items excluded areconsumer savingsprivate hospital services, and money giftexpenditure on gambling, and investments, lifegambling, and life income taxes, cash gifts, insurance and healthinsurance mortgage interest payments, services provided consumer credit charges under publicly funded and expenditure health insurance on illegal activitiesprograms Owner- ExcludedIncluded ExcludedExcludedIncluded Excluded occupied (acquisition(user cost) housingapproach) Formula Elementary
•
Geometric mean:•
Geometric mean: mainlyArithmetic Geometric Geometric•
Unweighted arithmetic mainly•
Ratio of arithmeticmeanmeanmeanaverage of prices:•
Arithmetic mean:mean: sometimeshomogenous products public water supply,•
Geometric average cable televisionof relative prices: other varieties Higher levelChained-LaspeyresLaspeyresChained-LaspeyresChained- LaspeyresLaspeyresLaspeyres Update interval WeightEvery 10yEvery 5yearsEvery 2 yearsMonthlyEvery 4yearsEvery year New productsNot regularlyEvery 5yearsEvery 2 yearsToday it is around Every 4yearsEvery year 6–7 years. In the future it will be continuously OutletsNot regularlyn.a.No update since 1996As needed (end or Annually for many every year opening of a new saler CP basic classes. All will be considered outlet samples are as it occurs)reviewed at least every 2 to 3y ClassificationCOICOPCOICOPCOICOPCOICOPCOICOPCOICOP PeriodicitymonthlyquarterlymonthlymonthlymonthlymonthlyCross-country Comparison: CPI (continued) ArgentinaAustraliaBelgiumBrazilCanadaFrance
MARIANNE COLLIN
GermanyHong Kong SARIndiaIndonesiaItalyJapan The CPI measures theThe CPI measures theThe CPI measures theThe CPI measures theThe CPI measures theThe CPI measures the average change in therelative change over price of change over price of change in a temporal change in theprice movements of prices for all goods time in the total cost time in the level of retailfixed market basket ofprices of a basket ofgoods and services and services of a specified basket prices of a fixed set ofconstant quality,goods destined to finalwhich are purchased by purchased byof consumer goods andgoods and services onconsumed by generalprivate consumptionconsumer throughout the households for services-fixed in which the Working populationcountry. It reflects consumption terms of quantity and Class families makechanges in the cost of purposesquality – generally expenditurespurchasing goods and purchased services in a fixed market by householdsbased at current retail in Hong Kongprices, but it is not designed to measure changes in the cost of living attributed to changes in the consumption structure of consumers Households, All Households, Industrial workersLow, middle and highFinal private consumptionHouseholds with two irrespectiveexcluding the income, pensioners,of families on the wholepersons or more of nationality or highest and lowestwage and salary workersItalian economic territory residence statusexpenditure brackettype of householdsaccording to ESA 95 Economic territoryHong Kong70 cities/townUrban areas (45 cities)The Italian economicWhole country territory; in particular outlets and tenants in 87 Italian chief towns are sampled and then surveyed
PROCEEDINGS IFC WORKSHOP – SESSION 1
Item coverageConsumptionGoods and servicesOn the basis of the–Private consumptionAll goods and services expenditures which arepurchased by householdsexpenditures incurred byexcept gambling, lotterynormally purchased for incurred in monetaryfor final consumption.the working class inand life insuranceconsumption; cash gifts transactions; the priceBettings, income taxes,1981–1982and remittances are changes for some 750endowment policyexcluded exactly specified premiums, mortgage goods and services payments, investments are combined. Such and savings are goods and services excluded are selected with the goal to represent the consumption by households with a sufficient degree of accuracy Owner- Included (rentalIncluded (rentalIncluded (rentalExcludedExcludedIncluded (rental occupiedequivalence)equivalence)equivalence)equivalence) housing Formula ElementaryRatio of arithmetic
•
Geometric mean:Ratio of arithmetic•
Average of priceGeometricRatio of meansheterogeneous meanrelativesmeanarithmetic mean products•
Geometric mean:•
Ratio ofseasonal goods arithmetic means: homogenous goods Higher LaspeyresLaspeyresLaspeyresLaspeyresChained-Laspeyres levelLaspeyres Cross-country Comparison: CPI (continued) GermanyHong Kong SARIndiaIndonesiaItalyJapanMARIANNE COLLIN
GermanyHong Kong SARIndiaIndonesiaItalyJapan al Every 5 yearsEvery 5yearsGenerally every Every 5yearsEvery yearEvery 5years 10years but currently 23y Every 5 years, Every 5yearsAt the same time Every yearEvery 2–3years or sooneras the cost of if necessaryliving survey Every 5 years, or Every 5yearsAdjusted if sample Every year (partialEvery year sooner if necessary outlet is not rotation of (if an outlet closes, active anymorethe sample) it is replaced by another) COICOPLocal classificationCOICOPCOICOPCOICOP scheme: 9 sections, 97 groups, 237 sub-groups, 984 items MonthlyMonthlyMonthlyMonthlyMonthly
PROCEEDINGS IFC WORKSHOP – SESSION 1
Cross-country Comparison: CPI KoreaMexicoMalaysiaNetherlandsPolandPortugal DefinitionThe CPI measures the The CPI measures the The CPI measures pure The CPI measures the The CPI measures the The CPI measures pure average change in prices evolution over time of a price changes over time average price changes average change in the price changes in fixed- for a fixed-market basket constant basket of goods in a fixed basket of goods of goods and services prices of goods and market basket of constant of goods and services of and services taken as and services commonly purchased byservices purchased for quantity and quality for constant quantity and representative of purchased by a majority householdsconsumption purposes the general population quality purchased byconsumption habits for of private householdsby the resident urban consumers urban householdshouseholds in Poland Coverage PopulationAll urban consumer units, All households in cities The target population All private households All private households All population, without excluding one-person with more than 20 000 includes the whole in the Netherlandsresiding permanently in restrictions households, farmers and inhabitantspopulation living in Poland, excluding fisherman’s households. urban and rural private institutional households Covers about 83.2 householdsand foreign households percent of the total urban population Geography36 cities were selected to Sample of 46 cities All states in Malaysia. Whole countryEntire area of the country.Entire country represent the all urban representing small, Prices collected in 116 Prices are collected in 209 (included the areas in Korea. The medium and large centres of price collection price survey regions. The Madeira and the indexes for each city are cities in seven regions represent those most region may be a small Azores islands) published every monthof the country frequented by consumers town or a part of a city for purchases of goods(e.g. a district). and servicesA purposive selection of regions was based on the size of population, density of a shop network and price
MARIANNE COLLIN
KoreaMexicoMalaysiaNetherlandsPolandPortugal The goods and services All commonly used All goods and services All goods and services All goods and servicesGoods and services included are limited to goods and services commonly purchased byessential to household bought within the considered representative consumption expenditures bought by thetarget population for consumption, paid out of territory by the reference of the structure of and exclude items that are covered population for consumption purposes. the net spendable income.population for purposes expenditure in private difficult to estimate consumption purpose, Excludes income taxes, Direct taxes and social of consumption. consumption by residents such as interest, damage including taxescharitable donations and insurance premiums are Expenditures for within the whole country insurance, contributions statutory contributions not included in the CPIcash gifts, life insurance, and membership fees, such as employee imputed rents, illegal but include rent depositsprovident fund and activities and some consumer savings, professional services, investments and life such as tax advising insuranceand consulting ExcludedIncluded (rental ExcludedExcludedExcludedExcluded equivalence) Ratio of
•
Geometric average: Ratio of arithmetic Ratio of arithmetic Geometric Geometric arithmetic food products average of pricesmeanmeanmean mean•
Arithmetic: the rest of the basket LaspeyresChained-Chained-LaspeyresChained-Chained- LaspeyresLaspeyresLaspeyresLaspeyres al Every 5 yearsAccording to the Every 5 yearsEvery 5 yearsEvery yearEvery year Income-Expenditure Survey Every 5 yearsEvery yearEvery 5 yearsEvery monthEvery yearAs weight ⬎0.1% of households’consumer expenditures Every 5 yearsEvery yearWhen necessaryEvery monthEvery yearn.a. Commodity Classification of COICOPCOICOPCOICOP Classification System Household Goods and was developed Services (CHGS) the National in the 1968 SNA Statistical Office MonthlyMonthlyMonthlyMonthlyMonthlyMonthlyPROCEEDINGS IFC WORKSHOP – SESSION 1
Cross-country Comparison: CPI SingaporeRussiaSouth AfricaSpainSwedenSwitzerland DefinitionThe CPI measures the The CPI measures The CPI shows the average The CPI is a statisticalThe CPI measures The CPI measures the change in the prices the changes over price level of all those measurement of the the average change pure change in prices of a fixed basket of time in the overall goods and services (a fixed evolution in the overall in prices of of goods and services goods and services level of prices basket of goods and prices of goods and goods and services bought for the purpose commonly purchased for goods and services services of unchanging services consumed byavailable for private of consumption by by a majority of purchased by public or equivalent quantity and the population living in consumption in the the resident households over timefor non-production quality) bought b a typical family dwellings economic territoryhouseholds in consumptionconsumer or household in Spainof SwedenSwitzerland in South Africa changes over time Coverage PopulationCentral 90% All household The target population All private households All households All private households in the distribution with various includes all South African resident in Spain. It doesconsuming goods residing permanently of households income levelshouseholds living in the not cover the and services for the in Switzerland (excluding single metropolitan and urban expenditure of person purpose of private person households) byareas (56% of the total resident in institutions, consumption in household expenditure number of South barracks and other non-Sweden African households) private households. GeographyWhole of SingaporeUrban population Nine provinces monitored Pricing take place in 18 All of SwedenAll of Switzerland; centres (266 cities)in retail and service outlets regions; 50 provinces sample of 16 regions in two broad geographical and two autonomous nationwide (town areas: “main metropolitan” cities: Ceuta and Melilla; built-up area) or “other urban” areas 141 municipalitiesselected among the within each province7 major regions
MARIANNE COLLIN
SingaporeRussiaSouth AfricaSpainSwedenSwitzerland All goods and –Goods and services purchasedAll goods and services All goods and All goods and services commonly by the reference population bought by the reference services bought services bought by purchased by the determined mainly from the population for the within Sweden for the reference index population Income and Expenditure of purposes of the purpose of population for the for consumption Households Survey. Items consumption; direct private consumption purposes of purposes; expenditure excluded are income taxes, taxes, expenditures except child care consumption; on direct taxes, contributions to pension on capital assets/and care of the expenditure on direct cash gifts, gambling plans, consumer savings investments, elderly, fees for taxes, cash gifts, and illegal activities and investments, gambling donations, gambling hospital care, gambling and illegal are excludedand expenditure on illegal and illegal activities life insuranceactivities are activitiesare excluded excluded Included ExcludedIncluded (user cost)ExcludedIncluded Included (rental (rental (user cost)equivalence) equivalence) Geometric meanGeometric meanGeometric meanGeometric meanGeometric meanGeometric mean LaspeyresChained-LaspeyresLaspeyresChained-LaspeyresWalshChained-Laspeyres al Every 5 yearsAnnuallyEvery 5 yearsEvery yearEvery yearAnnually Every 5 yearsas weight ⬎0.1% Every 5 yearsEvery yearEvery year
•
Weighted level: of households’Every 5 years consumer•
Un-weighted level: expendituresContinuously Every 5 yearsAs rarely as possibleEvery 5 yearsEvery 5 yearsEvery yearRegularly Singapore’s COICOPCOICOPCOICOPCOICOP COICOP Classification of Expenditure Items MonthlyMonthlyMonthlyMonthly MonthlyMonthlyPROCEEDINGS IFC WORKSHOP – SESSION 1
Cross-country Comparison : CPI ThailandUnited KingdomUnited StatesEurope DefinitionThe CPI measures the The CPI measures the The CPI measures HICP measures the average change in prices of a average change in prices of pure price change in a price changes of goods and fixed basket of goods goods and services bought in market basket of goods services available for and services purchased the UK for the purpose of and services of constant purchase in the economic for consumption by the consumption by all UK quality. The cost-of-territory of the Member States average households households, foreign visitors living concept is the for the purpose of directly in the urban and residents of institutional measurement objective satisfying consumer needs. areas throughout households. Prior to 10 Weighted average of the countryDecember 2003, the CPI was members states’HICPs published in the UK as the Harmonised Index of Consumer Prices Coverage PopulationIncludes households All private UK households, All urban consumer units, All households, include with one to five persons,foreign visitors towhich represent about 87% expenditure by foreign visitors households’incomethe UK and residentsof the total population(“domestic concept”) and 3,000–60,000bahts of institutional expenditure by individuals per month (in 2002)households living in institutions, but exclude the expenditure by residents whilst in a foreign country GeographyUrban areas in All of the UK i.e. All urban areas of 2,500 Economic territory 37 provinces England, Scotland, or more population within (including Bangkok)Wales and the 50 states; excludes Northern Ireland U.S. territories
MARIANNE COLLIN
ThailandUnited KingdomUnited StatesEurope All goods and services All monetary expenditure on Includes all consumption Private consumption except bought by the goods and services bought purchases by the gambling, lottery and life reference population within the domestic territory reference population; insurance for the purposes and covered by Household excludes gambling of consumption; Final Consumption and illegal activities expenditure on Expenditure (HHFCE) income tax, cash as defined for the UK’s gifts and donations National Accounts are excludedExcludedIncluded Excluded Included (rental (rental equivalence) equivalence) Arithmetic means of Geometric mean 61% geometric means Ratio of arithmetic mean or relative pricesof price relativesand 39% weighted ratio of geometric mean average of relative prices prices (⫽modified Laspeyres) Chained-LaspeyresChained-LaspeyresChained-LaspeyresChained-Laspeyres al Every 4 yearsEvery yearEvery 2yearsWeights must reflect the expenditure pattern in a period ending no more than seven years before the preceding December. Furthermore, each year a review of weights needs to be carried out, and weights have to be adjusted if
PROCEEDINGS IFC WORKSHOP – SESSION 1
Cross-country Comparison : CPI (continued) ThailandUnited KingdomUnited StatesEurope the review indicates that change in the weights would affect the all-item HICP by more than 0.1 percentage points on average of one year against the previous year. Country weights for euro area HICPs are updated in annual intervals New productsEvery 4 yearsEvery year, as Each year (on a Each year, when new goods weight ⬎0.1% rotating basis)account for at least 1/1000 of of households’for 25% of the indexall expenditure, new goods consumer have to be included expenditures OutletsSeldom– Each year (on a No specific HICP standards, rotating basis)but HICPs are constructed for 25% of the indexfrom target samples which are representative, reliable and comparable ClassificationThe classification COICOPCOICOPCOICOP system corresponds to the household expenditure survey conducted by National Statistics Office (NSO) PeriodicityMonthlyMonthly indexMonthlyMonthly index