Harmonised index of consumer prices (HICP) (prc_hicp)

National Reference Metadata in Euro SDMX Metadata Structure (ESMS)

Compiling agency: National Statistical Institute of the Czech Republic

Time Dimension: 2020-A0

Data Provider: CZ1

Data Flow: HICP_NES_A


Eurostat metadata
Reference metadata
1. Contact
2. Metadata update
3. Statistical presentation
4. Unit of measure
5. Reference Period
6. Institutional Mandate
7. Confidentiality
8. Release policy
9. Frequency of dissemination
10. Accessibility and clarity
11. Quality management
12. Relevance
13. Accuracy
14. Timeliness and punctuality
15. Coherence and comparability
16. Cost and Burden
17. Data revision
18. Statistical processing
19. Comment
Related Metadata
Annexes (including footnotes)
 



For any question on data and metadata, please contact: EUROPEAN STATISTICAL DATA SUPPORT

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1. Contact Top
1.1. Contact organisation

National Statistical Institute of the Czech Republic

1.2. Contact organisation unit

Price Statistics / CPI section

1.5. Contact mail address

Na padesátém 81 /100 82 Praha 10 — Strašnice /CZECH REPUBLIC


2. Metadata update Top
2.1. Metadata last certified 09/11/2020
2.2. Metadata last posted 09/11/2020
2.3. Metadata last update 09/11/2020


3. Statistical presentation Top
3.1. Data description

The harmonised index of consumer prices (HICP) is a consumer price index (CPI) that is calculated according to a common approach. It measures the change over time of the prices of consumer goods and services acquired by households. Because of the common methodology, the HICPs of the countries and European aggregates can be directly compared.

3.2. Classification system

European classification of individual consumption according to purpose (ECOICOP)

3.3. Coverage - sector

The HICP covers the final monetary consumption expenditure of the household sector.

3.4. Statistical concepts and definitions

The main statistical variables are price indices.

3.5. Statistical unit

The basic unit of statistical observation are prices for consumer products.

3.6. Statistical population

3.6.1. Statistical target population

The target statistical universe is the 'household final monetary consumption expenditure' (HFMCE) on the economic territory of the country by both resident and non-resident households... The household sector to which the definition refers includes all individuals or groups of individuals irrespective of, in particular, the type of area in which they live, their position in the income distribution and their nationality or residence status. These definitions follow the national accounts concepts in the European System of Accounts.

3.6.2. Coverage error population

No national deviation from the definition of the statistical target population.

 

3.7. Reference area

3.7.1. Geographical coverage

The HICP refers to the economic territory of a Member State as defined by ESA2010.

3.7.2. Coverage error regions

Generally, no geographical parts are excluded from coverage in weights; the price collection is not done in small towns and villages and in some districts, but the price level and development is well represented by the data collection elsewhere.

 

3.8. Coverage - Time

3.8.1. Start of time series

In accordance with Council Regulation (EC) No 1687/98, each Member State is required to produce a harmonised index of consumer prices (HICP) starting in January 1997.

3.8.2. Start of time series - national specifics

See the HICP database

https://ec.europa.eu/eurostat/data/database

Czech HICP index series starts from January 1996 (for all-items HICP and 12 main headings)

3.9. Base period

2015=100


4. Unit of measure Top

The following units are used:

  • Index point
  • Percentage change on the same period of the previous year (rates);
  • Percentage change on the previous period (rates);
  • Percentage share of the total (weights).


5. Reference Period Top

HICP is a monthly statistics.


6. Institutional Mandate Top
6.1. Institutional Mandate - legal acts and other agreements

Harmonised Indices of Consumer Prices (HICPs) are harmonised inflation figures required under the Treaty on the Functioning of the European Union. Council Regulation (EC) No 2016/792 of 11 May 2016 (OJ L 135) sets the legal basis for establishing a harmonised methodology for the compilation of the HICP, the MUICP and the EICP.
The Commission has brought forward detailed Regulations establishing the specific rules governing the production of harmonised indices.

Regulations:

  • Initial implementing measures (1749/1996)
  • Sub-indices (2214/1996)
  • Weights (2454/1997)-repealed
  • Coverage of goods and services (1687/1998)
  • Geographic and population coverage (1688/1998)
  • Treatment of tariffs (2646/1998)
  • Treatment of insurance (1617/1999)
  • Revised sub-indices (1749/1999)
  • Treatment of products in the health, education and social protection sectors (2166/1999)
  • Timing of entering purchaser prices (2601/2000)
  • Treatment of price reductions (2602/2000)
  • Treatment of service charges (1920/2001)
  • Minimum standards for revisions (1921/2001)
  • Common index reference period (1708/2005)
  • Temporal coverage of price collection (701/2006)
  • Sampling (1334/2007)
  • Seasonal products (330/2009)
  • Weights (1114/2010)
  • Owner-occupied housing (93/2013)
  • Common index reference period (2015/2010)

 

All relevant regulations as well as further methodological details can be found in the HICP section on Eurostat's website under Methodology => Legislation.

6.2. Institutional Mandate - data sharing

None.


7. Confidentiality Top
7.1. Confidentiality - policy

 Regulation (EC) No 223/2009 of the European Parliament and of the Council, of 11 March 2009, on the transmission of data subject to statistical confidentiality to the Statistical Office of the European Communities.

7.2. Confidentiality - data treatment

 

Aggregation of disclosive information,  aggregation rules on aggregated confidential data, primary confidentiality with regard to single data values.


8. Release policy Top

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see point 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

8.1. Release calendar

The release of the CPI/HICP follows a preannounced calendar/schedule.

For calendar see: 

https://www.czso.cz/csu/czso/calendar-of-news-releases-2020

National Press Release for CPI: on the 9th calendar day of every month, at 9h00 (local time).

 

8.2. Release calendar access

HICP see Eurostat's website.

CPI:

Aggregate consumer price index (for households total) broken by 12 divisions of ECOICOP classification is published as “Press Release” on the 9th calendar day following the end of reporting months at http://www.czso.cz/. The following day the publication “Consumer Price Indices – Basic Information” is published.

More detailed data on the consumer price indices (down to ECOICOP4 = class level are then published monthly on web site in the document “Consumer Price Indices (cost of living) – Detailed Information” which is released on the 25th day following the end of reporting period. The publication “Consumer Price Indices (cost of living) – Detailed Information” providing data for the whole year is published on yearly basis on the 25th January. 

This means, that HICP details (down to ECOICOP5 = sub-class level) are published earlier in the Eurostat online database.

Publications are released according to the Catalogue of Products

https://www.czso.cz/csu/czso/catalogue-of-products

published on web sites of the CZSO.

 

Publications with the consumer price indices:

Monthly:

Consumer Price Indices – Basic information (code 012018-18)

Consumer Price Index – Detailed information (code 012023-18)

 

Quarterly:

Indicators of Social and Economic Development of the Czech Republic (code 320202-18)

 

Yearly:

Consumer price index – Detailed information (code 012019-18)

Statistical Yearbook of the Czech Republic (code 320198-18)

Statistical Yearbook … regions (code 330xxx-18)

Czech Republic in Figures (code 320203-18)

Czech Republic in international comparison (selected data) (code 370002-18)

 

 List of time series with consumer price indices:

 Monthly:

Consumer Price Indices – Cost-of-Living (code 012021-18)

 

Quarterly:

Consumer Price Indices – Cost-of-Living (code 012022-18)

  

List of analyses with consumer price indices:

 Quarterly:

Development of Consumer Price Indices (code 012020-18)

  

List of news releases with consumer price indices:

 Monthly:

Consumer Price Indices – Inflation (code 012024-18)

Average prices survey of selected products – food and beverages (code 012025-18)

 Weekly:

Average prices survey of selected products – fuels and oil products (code 012026-18)

 The selected outputs from the consumer price area published in the CZSO public database:

https://vdb.czso.cz/vdbvo2/faces/en/index.jsf?page=statistiky#katalog=31779

8.3. Release policy - user access

Users are informed that the data is being released by a publication calendar.

There is no pre-access for any user.

Press release for CPI includes also HICP annual and monthly rate for all-items level. Published on the internet for all users. No privileged users exist. The link to Eurostat website is included. No more HICP data published by the NSI.


9. Frequency of dissemination Top

Monthly


10. Accessibility and clarity Top

Detailed HICP is not published by the Czech Statistical Office.

CPI is published up to COICOP3, for food up to COICOP4 levels

Flash Estimate is not calculated.

 

CPI All published indices are rounded to 1 decimal place including the basic index (2015=100).

All indices derived from basic indices are  rounded to 1 decimal place before their publishing.

For HICP only monthly and annual rate is published, rounded to 1 decimal (same derivation procedure as Eurostat uses). HICP is marked as preliminary in CPI Press release. It contains a link to the Eurostat Press Release and the database for definitive HICP.

 

Press release and most of the publications are both in Czech and English.

10.1. Dissemination format - News release

HICP total index is published together with CPI Press Release (https://www.czso.cz/csu/czso/consumer-price-indices-inflation).

Press release for CPI includes also HICP annual and monthly rate for all-items level. (Czech, English)

Press release  is published on the internet for all users. No privileged users exist. The link to Eurostat website is included. No more HICP data published by the NSI.

10.2. Dissemination format - Publications

Detailed HICP is not published by the Czech Statistical Office (CSO).

CSO publishes only CPI. Publications refer to Eurostat HICP database for HICP detailed indices.

 

CPI is published as follows:

Monthly data:

  • Basic indices 2015=100
  • Annual rates of change
  • Monthly rates of change
  • 12-month average rate of change

Regularly are calculated also breakdowns of m-o-m and y-o-y changes in the consumer price indices expressing the contribution (in % or percentage points) of individual components of consumption basket to the aggregate index change.

 

Other CPI publications see 8.3. Release calendar access

10.3. Dissemination format - online database

Link to the online database where the HICP is disseminated:

HICP database.

https://ec.europa.eu/eurostat/data/database

 

10.4. Dissemination format - microdata access

Micro data are provided on demand only at NSI.

No privileged users exist, but there is closer cooperation with Czech National Bank and Ministry of Finance.

10.5. Dissemination format - other

Paper dissemination was almost abandoned.

 

10.6. Documentation on methodology

The HICP Methodological Manual provides the reference methodology for the production of HICP. (https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-GQ-17-015)

10.6.1. Documentation on methodology - national specifics

Methodology description in English on website:

https://www.czso.cz/csu/czso/what_is_it_inflation_resp_inflation_rate

contains:

- User´s methodological manual

- composition of the consumer basket (including history; down to ECOICOP5): 

 

 

 

 

10.7. Quality management - documentation

See Eurostat's Compliance Monitoring Report of 2009.


11. Quality management Top

System of regular mapping of user requiremets, expert advisory boards, external and internal methodical audits, system of continuous data checks, detailed monitoring of data collection.

11.1. Quality assurance

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

Production/methodology:

CPI production is subject to audits of experts from both the NSI and external users. Audits are targeted to methodology and the organization of the CPI production process. Last audits on CPI production was performed in 2005 and 2012.

Every year CSO holds regular meeting of advisory Committee on CPI based of experts from main users to ensure relevance of CPI production

Details of the CPI/HICP are often solved in Advisory Committee

Continuous control of the data flow:

Continuous controls are targeted on the quality of the data.

 

Stage 1 – Price information gathered by the price collectors is checked by the special central office staff. Price collection takes the first 3 weeks of the reference month. Extreme price deviations are sorted out with the help of software. There is no automatic rejection; all suspicious data are re-checked by collectors. Centrally collected prices are entered into the system by central office staff. A 'preliminary index' is then processed by central office staff. This stage ends towards the end of the reference month. Price collection independently supervised.

Price collection is randomly checked by a supervisor. (Price can be checked the same day in the same outlet by independent person)

Stage 2 – Central staff checks the preliminary results. It is possible to see all price details and to perform checking of both individual prices and indices. Then quality adjustment and re-sampling/replacement procedures are carried out. The CPI is then compiled again. This can be repeated several times. Final results are approved and prepared for publication.

Stage 3 – HICP is derived from CPI sub-indices. HICP-CT is derived from HICP sub-indices. HICP thus inherits data checks of CPI.

11.2. Quality management - assessment

11.2.1. Compliance monitoring - last report and main results

Compliance Monitoring

11.2.2. Quality assessment - national specifics

 National statistical audits targeted to the methodology and the organization of the CPI production process.

 CZSO has the policy of regular audit on important statistical indicators, including CPI. The audit is done by the senior stasticians from the Office, with participation of the High School of Economy in Prague and possible participation from importantant users.

Link to the page where the reports are published

 https://ec.europa.eu/eurostat/web/hicp/methodology/  #Compliance Monitoring

Eurostat recommends that / Follow-up to recommendations

 

 

As regards newly significant outlets and internet shopping, further analysis

should be carried out in order to provide evidence that they are correctly

represented in the HICP.

Survey of newly significant outlets and internet shopping: data of GfK were regularly used to map the market; representativity of the sample improved after analysis of first SD obtained; internet collection extended – see also “Sampling design: outlets – detailed information”. In real market internet purchases are spread over many ECOICOP sub-classes and it is difficult to define representative items (EAs) to be collected by the regular price collectors. CZSO has rather plan to reduce slightly the number of regular price collectors and introduce “internet price collectors” instead, who would survey prices for a specific “internet consumer basket” reflecting the typical household’s consumption via internet.

 

The HICP sample be reviewed and updated annually, in particular for critical

expenditure groups, in order to be able to adapt promptly to changes in

market structures and include newly significant expenditures and outlets into

the HICP as they become evident. The CPI/HICP sample is reviewed and updated annually . See also “Comparability over time”; representativity of the sample improved after analysis of SD obtained; data of GfK are also used to monitor changes. Substantial methodical changes and changes of the sample are discussed also with the Advisory Committee for CPI. See also “User satisfaction”

 

Further analysis be carried out for distinguishing foreign business

expenditures from foreign tourist expenditures.

Distinction of foreign business expenditures from foreign tourist expenditures is done by  NA. Data are derived from  Tourism Satellite Account (TAS).  See also “Weights”

 

 

Foreign expenditure on medical services in the economic territory be closely

monitored and its significance for the HICP properly assessed. Eurostat

welcomes the plans of CzSO to introduce dentist services paid by foreigners

from 2009. Foreign expenditure on medical services are concentrated mainly to dentist services. The prices (for all medical services, if not payed from insurance) are the same as for the domestic patients. The prices are surveyed by price collectors.

 

Eurostat welcomes the plans of CzSO to introduce exchange office services

into the Czech HICP. Exchange office services were not introduced into the Czech HICP because (1) Payments are concentrated to credit/debit cards (2) Methodology is not known/clear/harmonised.

 

 

Concerning income-dependent prices, price changes resulting from income

changes of households, in particular services by elderly homes be reflected in

the Czech HICP, as required by Article 4 of Council Regulation (EC) No

2166/1999. Income-dependent prices – the area is monitored. See “Social protection”.

The share of government payments for elderly houses remains negligible and constant over time: The elementary aggregate - E12.402.01 “Accomodation in old people´s home” has a relative HICP weight 4.24‰, of which estimated max 2 % is paid by the government.

 

For passenger transport by air, PCs as well as for fruits and vegetables, the

CzSO review and monitor the representativity of the sample and its

elementary aggregates, also taking into account the forthcoming standard on

the seasonal items.

For passenger transport by air - introduction of internet prices collection was added to monitor properly the market (consumers buy often via internet and well in advance).

Total weight for passenger transport by air is not important. See “Flights”.

Some items if fruit products were added like strawberry, watermelon and kiwis, as they are these days available the whole year. There is practically no important fresh fruits and vegetables, which are not included in the basket. See “Seasonal items – detailed information”

 

Regional expenditure weights should be used instead of population weights

when aggregating regional data. Regional expenditure weights are now used instead of population weights. Regional weights are estimated as a proportion of relative share of HFMCE within country. The number of population and average salary is used for the estimation. See also “List of elementary aggregates”

 

 

CzSO undertakes the necessary steps to verify that, in case of missing

observations, price changes are reproduced correctly and the representativity

of the sample is maintained from month to month.

Supervision of price collectors improved. See also” Devices for price collection”

 

The CzSO review their procedure for case specific quality adjustment

methods. In particular, Eurostat encourages CzSO to speed up the

implementation of recommended quality adjustment (QA) procedures, with

special respect to the implementation of consumption segments in case of

personal computers. Number of representative items in PC equipment increased – there are 3 now: Notebook, Tablet, Notebook - sale via Internet. Expert judgement is used for QA.


12. Relevance Top
12.1. Relevance - User Needs

In addition to being a general measure of inflation, the HICP is also used in the areas of:

  • wages, social benefit and contract indexation;
  • economic forecasting and analysis;
  • measuring specific price trends;
  • accounting purposes and deflating other series;
  • inflation targeting by central banks;
  • cross-country economic comparisons.

 

The euro area (evolving composition) index is used by the European Central Bank (ECB) as the main indicator for monetary policy management. The ECB and the European Commission's Directorate-General for Economic and Financial Affairs (DG ECFIN) use the HICP for assessing price stability and price convergence required for entry into European Monetary Union.

Other users include: National Central Banks, financial institutions, economic analysts, the media and the public at large.

12.1.1. User Needs - national specifics

In national legislation CPI serves mainly as compensative factor (e.g. national pension scheme).

Besides as a general measure of inflation, CPI have a variety of potential other uses, for example (level of importace descending):

  • inflation targeting by central banks.
  • wage, social benefit and contract indexation;
  • accounting purposes and deflating other series;
  • input to economic forecasting and analysis;
  • measuring specific price trends;

At national level CPI is preferred to HICP.  Generally, HICPs are in particular considered suitable for cross-country economic comparisons.

12.2. Relevance - User Satisfaction

To asist creation of CPI concepts, Advisory Committee is summoned by the Czech Statistical Office.

The Advisory Committee consists of representatives of ministries, CNB, research institutes, Economic University, trade-unions, organizations of the retired and selected branches of the CZSO. Meetings are  held regularly.

 

The Committe discusses the updating of the consumer basket and methodology of the consumer price processing in the next periods. But the board has no direct influence on the HICP. However the active involvement of users at a national level may influence discussion at the European level.

Opinions of the users not in Committe are not systematically collected.

12.3. Completeness

All COICOP indices at 5-digit level (ECOICOP) accounting for more than one part in a thousand of the total expenditureare are produced.

exceptions (no NA or HBS information is available concerning the value of consuption):

02.2.0.3                Other tobacco products

04.1.2                   Other actual rentals

04.1.2.1                Actual rentals paid by tenants for secondary residences

04.3.2.5                Services of carpenters

05.2.0.9                Other household textiles

09.2.1                   Major durables for outdoor recreation


13. Accuracy Top
13.1. Accuracy - overall

The accuracy of HICP is generally considered to be high. The accuracy of source data is monitored by assessing the methodological soundness of price and weight sources and the adherence to the methodological recommendations. There is a variety of data sources both for weights (National Account data, Household Budget Survey data, etc.) and prices (visits to local retailers and service providers and central collection via mail, telephone, e-mail and the internet are used). The type of survey and the price collection methods ensure sufficient coverage and timeliness. The outlets, from which prices are collected, are chosen to represent the existing trade and services network and they are based usually on three main criteria:

  • Popularity with consumers,
  • Significant turnover from consumer sales and
  • Availability of goods and services included in the HICP basket.

All the private households in the economic territory of the country are covered, whether resident or not and irrespective of their income.

13.2. Sampling error

The HICPs are statistical estimates that are subject to sampling errors because they are based on a sample of consumer prices and household expenditures, which are not the complete universe of all prices/expenditures.
The exact sampling error is not known.
The NSI tries to reduce the sampling errors by using a sample of consumer prices that is as large as possible, given resource constraints. The NSIs use models that optimise the allocation of resources by indicating the number of prices that should be observed in each geographic area and each item category, in order to minimize the variance of the all-items index.

Non-probability sampling is used.

13.3. Non-sampling error

Possible influence to the non-sampling error and the bias risks associated with HICP:

 -          Under coverage - consumption of upper class is not well known.

-           Survey instrument, respondent and interviewer where relevant - minimized by independent controls of price collectors.

-           Unit (non)response including causes for nonresponse, item nonresponse for key variables.  - no serious problems so far registered.  

-           Data editing, coding and imputation where relevant - minimized by consistency checks, comparison of similar prices, previous prices; imputations is limited only to seasonal items

 


14. Timeliness and punctuality Top
14.1. Timeliness

The full set of HICPs is published each month according to a pre-announced schedule, usually between 15 and 18 days after the end of the reference month. Each year, the January news release is published at the end of February to allow for the annual update of the weights of individual product groups and the relative country weights of Members States in the country-group aggregates.

The euro area flash estimate is published on the last working day of the reference month or shortly after that.

14.2. Punctuality

Since the March 1997, launch of the HICP release, the HICP for the country groups aggregates has always been published on the pre-announced release dates.


15. Coherence and comparability Top
15.1. Comparability - geographical

HICPs across Member States are comparable. Any differences at all levels of detail should only reflect differences in price changes or expenditure patterns.

To this end, definitions and classifications have been harmonised in a series of legal acts. The HICP is produced according to these minimum standards that may be applied with some flexibility as long as they result in an index that is estimated to differ systematically by less than or equal to 0.1 percentage points on average over one year against the previous year from an index compiled following the minimum standards (Article 4 of Council and Parliament Regulation (EU) 2016/792).

15.2. Comparability - over time

HICP data are fully comparable over time. There have been several improvements in methodology since the HICP was introduced with the aim of improving reliability and comparability of the HICP. 

 

Information on the main re-referencings and revisions:

HICP is derived from CPI, CPI is biannually chained index (minor updates of sample continuously, minor methodical amendments annually).

No revisions of published CPI or HICP indices ever occured (since 1995). 

Overview of HICP re-referencing:  1996 = 100, 2005 = 100, 2015=100

No statistical breaks or  interrruptions in the HICP series due to changes in the methods have occurred.

 

 

15.3. Coherence - cross domain

Differences between the HICP and national CPI:

The following expenditure is included in the HICP but excluded from the national CPI: consumption expenditure of non-residents in the economic territory.

The following consumption expenditure is included in national CPI but excluded from HICP: Monetary expenditure of investments in the owner-occupied house is measured (purchase of the dwelling itself, self-builders, renovations and major repairs). Insurance of dwellings of owner-occupiers is included.

Games of chance, drugs, prostitution etc. are excluded both from CPI and HICP.

Methodology, teritorial coverage and product coverage is the same. Small exception HICP index for COICOP 11.2 Accommodation services differs from CPI (luxury tourist hotels, namely in Prague are not in CPI, but they are in HICP).

 

Sharing information between statistical units:

There is methodological cooperation and sharing of experience namely between: CPI and PPI, CPI and  Business Services Price Index .

For revisions of CPI/HICP cooperation with NA and HBS is necessary.

 

15.4. Coherence - internal

The HICPs are internally coherent. Higher level aggregations are derived from detailed indices according to well-defined procedures.


16. Cost and Burden Top

Not available


17. Data revision Top
17.1. Data revision - policy

The HICP series, including back data, is revisable at any point in time under the terms set in Commission Regulation (EC) No 1921/2001 of 28 September 2001. The published HICP data may be revised for corrections, and new or improved information.

17.1.1. Data revision - policy - national specifics

There is no specific national policy for correcting mistakes and errors in CPI/HICP production. Discovery of an error would have to be considered by a special body, consisting of the President, statistical directors and relevant experts. The solution should follow CZSO general principles on dissemination policy. Regarding the specific solution found, a possible revision of previous results might occur. For HICP the relevant Council Regulation for revisions of HICP would be respected.

No mistakes have been discovered yet that would have required treatment according to this regulation on the compilation of the HICP.

Transparency and control of disseminated data is supported by the fact that CPI detailed indices (to the level of EA) can be provided to users on demand. Typically Czech National Bank and Ministry of Finance require regularly the information (data and explanation). 

 

17.2. Data revision - practice

Major (planned) revisions of CPI based on specifically targeted Household Budget Survey are performed every 5-6 years. The last one was done in 2016. For HICP based on CPI sub-indices, the revision (planned) of weights based mainly on National Accounts data is performed every year, with the possible inclusion of new sub-indices. Methodical changes induced by the harmonization process are usually introduced both in CPI and HICP. Where the HICP methodology might be contradictory to the national concept of CPI, a specific sub-index might be calculated as a duplicate – one for CPI use, the other for HICP.


18. Statistical processing Top
18.1. Source data

18.1.1. Weights

The main sources for the weights are National Accounts (ECOICOP5 and higher levels) and the Household Budget Survey (Elementary Aggregates). To other sources belong commercial market surveys, scanner data and detailed information from service providers (like transport).

Weights obtained from NA used for HICP are updated anually. Detailed weights are updated once every 5-6 years or more often, if the impact on results would be significant.

Weights reflect the HFMCE of the total population – domestic concept. Institutional households are included. The most important group of institutionalised persons are retirees in retirement homes (almost 1% of the total population). No specific group is excluded.

As a basis for estimation of tourist expenditure the Balance of Payments is used. The structure of tourist expenditure is estimated. Foreign business expenditure is distinguished from private foreign expenditure. Domestic household expenditure abroad is estimated from HBS survey. Expenditures on package holidays abroad are included if booked at resident travel bureaus.

 

18.1.1.1. Compilation at elementary aggregate level

There are 674 weights at Elementary Aggregate level plus 17 weights of complex sub-indices (mostly tariff items, like electricity).

Each tariff sub-index has internal weights of its items (but variable number through time).
The weighting reference period used in 2018 is the year 2016; the weighting reference period used in 2017 was the year 2015.

Weights of elementary aggregates are updated every 5-6 years (or more often if necessary). Weights of complex sub-indices are updated annually.

The lowest aggregated level is ECOICOP5 where weights are sum of subordinated EAs and (possible) sub-indices.

The main source of EA weights is HBS; also NA, scanner data (namely for food and beverages), market research (GfK)

Other important information sources to improve details (individual products): Insurance Association (insurance), electricity and gas distributors (electricity, gas), Czech Railways (passenger railway transport), banks (financial services), external experts (new and second hand cars), municipalities (local public transport in big cities).

Judgmental adjustments or equal weights are used only if there is no other source of data available (exceptionally)

For the purpose of the consumer price revision the Social Surveys Unit of the CZSO carried out an extraordinary annual survey with very detailed breakdown of household financial resources in 2016.

Source for weights for regions is regional NA.

HBS data are often corrected by NA. Weights are corrected for net weight approach for insurances. Moreover the data are compared with previous sets of weights to identify possible errors and to trace possible/impossible changes within consumption structure of households. Results are discussed with NA in order to improve the quality of weights. 

No explicit weights for outlets are used.

18.1.1.2. Compilation of sub-index weights.

The weights at sub-index level (ECOICOP 5) are derived from National Accounts based on t-2.

Weights are price updated to December t-1.

Weights for insurance services  are calculated as a moving average of the last 3 years.

Weights of EA are not price updated.

18.1.1.3. Reference period higher levels

T-2:  The weighting reference period for ECOICOP 5 levels and higher used in 2020 is the year 2018, etc.

Weights of higher aggregates  are sum of weights of subordinate levels (consistency)

18.1.1.4. Weights - plausibility checking

Weights for the annual updating obtained from NA are checked against long term trends in the time series or relative weights.

Similar process is done for the weights at lower levels, if possible/applicable.

18.1.2. Prices

The price data is mostly based on survey; administrative data sources are used only in specific cases.

18.1.2.1. Data Source - overview  

The price data is mostly based on survey; administrative data sources are used only in specific cases. Scanner data are collected, but not used as price information yet.

Main source of weights on the level of COICOP5 is NA (because of the domestic concept HBS data have to be corrected by NA).

The main sources for the weights are National Accounts (at the highest level) and the Household Budget Survey (at the lowest level).

There are 700 HICP weights at national level of items plus 17 weights of tariff sub-indices. Each tariff sub-index has internal weights of its items (but variable number through time of items within each of the 17 tariff sub-indices).

HBS data are corrected by NA. Weights are corrected for net weight approach for insurances. Moreover the data are compared with previous sets of weights to identify possible errors and to trace possible/impossible changes within consumption structure of households. Results are discussed with NA in order to improve the quality of weights used in final stage (e.g. for the calculation of the new chain in the index).

 

18.1.2.2. Scanner data - general information

 Scanner data are collected and processed for one big hypermarket chain and three small supermarket chains. Data serve for analysis and have not yet been included into CPI/HICP calculations.

 

18.1.2.3. Bulk web scraping - general information

Bulk web scraped data not used

18.1.3. Sampling design and procedure

18.1.3.1. Sampling design: regions - general information

HICP covers the entire area of the country. All of the 14 regions (NUTS3) are covered. Within each region several districts are selected (that way, about half of all existing districts are selected).

Prices are collected in all the regional capitals and in of all of the selected district centers. Rental is collected laso for some smaller towns.

Villages are excluded from price collection.

18.1.3.2. Sampling design: outlets - general information

In total, about 8 000 outlets in the country are chosen for the survey. Outlets are selected on the regional level (but with central recommendations as to the proportion of basic outlet types) according to local knowledge about retail sales distribution for each of the consumer basket items (EA-elementary aggregate). In practice, outlets are selected/replaced by price collectors mostly after identifying the non-availability/non-representativity of the outlet previously selected.

Outlet selection is centrally adjusted based on information about shares of sales for individual groups of products between basic outlet types and between individual hypermarket chains. A major outlet sample update occurs every 5-6 years and coincides with the general index revision (based on detailed Household Budget Survey).

Internet shopping is included in the index; market stalls are included for fresh fruit and vegetables.

A kind of general outlet survey is done every year in cooperation with GfK for particular goods and services.

Reporting network is constituted by shops (including hypermarkets, supermarkets, chain stores), service shops and other institutions providing services (approx. 8500) – hereinafter only the “respondents.” (outlets)

Consumer prices are surveyed in 35 selected districts in the Czech Republic and in the Capital of Prague.

The Capital of Prague splits into 8 territories (strata), Brno into 3 strata, Plzeň and Liberec split into 2 strata. Maps of strata are deposited in the Regional Office of the CZSO in Hradec Králové (hereafter RO in Hradec Králové) and also with one of the respective employees of field survey department.

Majority of respondents are selected by the field survey department employees of the CZSO upon an agreement with the owner (authorised person) of a selected reporting unit of the reporting network. For centrally surveyed prices the selection of reporting units is done by the Consumer Prices Statistics Section of the CZSO Prague.

Respondents are important centres of sale or provision of services to the population in the district, i.e. the reporting network includes hypermarkets and supermarkets. Included are also Asian sellers in stone shops, however, not those in the open-air market places.

18.1.3.3. Sampling design: products - newly significant goods and services

Identification of new products is done both on the level of price collectors and the regional (2)/central (1) staff. Decision about necessity of their inclusion into survey is often subjective.

There is no systematic comprehensive source of information but a collection of small market researches on particular goods and service classes, possibly with the help of producer organisations. 

CZSO regularly uses results of GfK market survey. Next sources are scanner data, detailed HBS, detailed data from providers of (tariff) services.

The inclusion of a new variety (change of parameters within the description of EA) is done every month. Quite a (“radically”) new EA is normally introduced only in December, but only exceptionally in the current month, if necessary

18.2. Frequency of data collection

Price data is collected every month.

18.3. Data collection

18.3.1. Price collection surveys

Definition of units (for details see 6.1.5. Organisation unit - portfolio; 6.1.6. Regional Organisation of consumer price statistics

Central Price Statistics Department - Consumer Prices Statistics Unit (C)

Regional Office Hradec Králové -  Section for Processing of Consumer and Agricultural Prices (R)

Regional price data collectors  (DC)

 

Price collection is performed in Prague and in 35 districts (NUTS4) out of 75 altogether. The districts are evenly spread over the country. The regional collection is done in the principal town of the districts and close surroundings (namely hypermarkets and supermarkets around). Rental  is surveyed also in other small towns outside the seat town of the district.

 

Procedure

Stage 1 – Data collection, data validation, pre-processing

Price information gathered by the collectors (DC) is checked by the (R). In case of doubt they will contact by phone the field survey collectors (DC) and verify the prices. In exceptional cases they verify the surveyed price directly in the reporting unit. In addition, they perform scheduled control of the field survey department employees directly in the field. On these inspections records on defects, if any, are taken stating the date of their removal.

Price collection takes first 3 weeks of the reference month. Extreme price deviations are sorted out with the help of software. No automatic rejection is done, all suspicious data are checked again by (DC). Centrally collected prices are entered into the system by (C). (The database can be simultaneously shared between (C) and (R)). A “preliminary index” is then processed by (R). This stage ends towards the end of the reference month.

 

Stage 2 - QA-procedures, resampling, result validation, dissemination

Staff (C) checks the preliminary results. It is possible for (C) to see all price details and to perform checking of both individual prices and indices. Quality adjustment and resampling/replacement procedures are done by (C). The “Index” is then compiled again by (R). This process may take several rounds. Final results are approved by (C) and prepared for publication.

 

There exists two different manners of data collection. Part of consumer basket is constituted by centrally surveyed prices  (e.g. same prices for the whole Czech Republic or average prices detectable from various reports, prices surveyed on the Internet). These prices are observed and surveyed by employees of the Consumer Prices Statistics Section of the CZSO Prague (C), the RO employees in Hradec Králové (R) and employees of the Field Surveys Department (DC). Prices are surveyed on monthly basis.

 The share of centrally collected prices is about 10 % (5500 to 6000).

 Price collectors have permanent job. They are partly used also for Household Budget Survey, which enables to share the experience with a related statistical field.  There is, altogether, 47 price collectors, of which 8 in Prague.

Price collectors (DC) have written methodological instructions “Instructions for survey, verification and presentation of data on consumer prices of goods and services included in the consumer basket” (about 30 pages including appendices) concerning namely: outlet selection, priced item selection (EA-list), treatment of price reduction, data recording, treatment of seasonal items, replacements, etc.) Amended one time every year. Prepared by (C) together with (D).

Every year there is a meeting/training for data collectors (DC) and regional processing staff (R) organized by central staff (1).  The meeting is held on level (C). It includes also multilateral exchange of information between (C), (R) and (DC), like news about changes in the market and how to treat them; the changes of the concept, practical experience/solutions etc.)

18.3.2. Timing of price collection

The prices are collected between the 1st and the 20th day of each month.

 

Generally, all EAs are priced every month, but some of them do not have price or do not occur continually in the market like:

  • seasonal goods (clothing, footwear),
  • yearly charges and fees (education fees, dancing courses, almanac/diary…)

 Prices collected more frequently than monthly apply to fresh fruit and vegetables – pricing is spread evenly over first 3 weeks of the current month. This is arranged by the appropriate division of the set of surveyed regions.

Petrol and diesel fuels for personal transport equipment are priced every week – four times per month.

Prices of goods are entered for the month in which they are observed, prices of services are entered for the month in which the consumption of the service at the observed prices can begin. Package holidays are treated as services.

18.4. Data validation

Price collectors: Electronic devices used for primary data collection/editing – first validation for price extremes and correct editing.

Data processing: Second validation – checking for extraordinary low/high prices within Elementary Aggregate, checking for correct codes, checking for extra price movements within time.

Final calculations, publications: Validation of individual results after quality adjustments procedures. Assessment of overall results.

18.4.1. Data validation - price data

Price collectors: Electronic devices used for primary data collection/editing – first validation for price extremes and correct editing.

Price information gathered by the price collectors is checked by the special central office staff. Price collection takes the first 3 weeks of the reference month. Extreme price deviations are sorted out with the help of software. There is no automatic rejection; all suspicious data are re-checked by collectors. Centrally collected prices are entered into the system by central office staff.

Price collection is randomly checked by a supervisor. (Price can be checked the same day in the same outlet by independent person)

 Data processing: Second validation – checking for extraordinary low/high prices within Elementary Aggregate, checking for correct codes, checking for extra price movements within time. A 'preliminary index' is then processed by central office staff. This stage ends towards the end of the reference month.

Central staff checks the preliminary results. It is possible to see all price details and to perform checking of both individual prices and indices. Then quality adjustment and re-sampling/replacement procedures are carried out. The CPI is then compiled again. This can be repeated several times. 

Checks for data consistency.

Final calculations, publications: Validation of individual results after quality adjustments procedures. Assessment of overall results. Final results are approved and prepared for publication.

HICP is derived from CPI sub-indices. HICP-CT is derived from HICP sub-indices.

CPIs and HICPs are approved by the highest management of the CZSO in the context of the current economic situation in the country.

Price Statistics Department has to explain all the price movements in CPI in relation with the changes of the supply/demand on the consumer market, administrative changes and external influences on the economy.

 

 

 

18.5. Data compilation

18.5.1. Index formulae

Czech CPI/HICP is a Laspeyres-type index covering the ECOICOP international classification.

The ratio of the arithmetic means is universally used for computing the elementary price indices. No alternative formula is used.

The average price of the elementary aggregate for the CR is calculated as weighted arithmetic mean of prices for regions calculated by simple arithmetic mean. The weight corresponds to the estimated relative consumption in the region in 2016.

An exception is the average price calculation for the Czech Republic in respect of the following representative items: rentals and services related to the use of dwelling in rental houses, payment for the use of co-operative dwellings and services related to the use of co-operative dwelling, spa treatment fully covered by patient, second-hand cars, fuel, air transport, tow tickets, holiday abroad (stay by the sea-side), school fees at higher technical school, university admissions fee, school fee at private university, lunch in the canteen, accommodation in student hostel, insurance of a house, dwelling and accident insurance, insurance of cars including compulsory cover. Average price calculation for these items is specific (e.g. number of patients in spa).

The formula is compliant with HICP legislation. Using of arithmetic averages (rather than geometric mean) is preferred for the parallel use of mean prices as public “Average prices” (better understanding, interpretation). 

The number of decimals:

Full price for observation ( = one decimal: price xx.x CZK), no rounding.

For consecutive calculations 2 decimals are used (= usually 4 to 6 valid digits).

For weights, 6 decimals are used.

For internal calculations (aggregations, chaining) 4 decimals are used for basic indices.

Basic indices are then rounded to 1 decimal place.

Rates of change are derived from rounded basic indices.

All published indices are rounded to 1 decimal place.

All indices derived from basic indices are  rounded to 1 decimal place.

All published indices are rounded to 1 decimal place.

Truncation is not used.

18.5.2. Aggregation method

HICP is derived from CPI; CPI is chained index with bi-annual chaining - see 18.5.1.3. Chaining and linking method

CPI index is Laspeyres index. Price indices for EAs are aggregated bottom-up.

Some parts of consumer basket are not covered by EAs, but by a more complex ready index (called "specific sub-index). These are cases with more complex price changes, which cannot be simply captured by a few EAs - typically tariff prices.

The use of specific sub-indices was newly introduced after the 2005 CPI revision. These apply to base indices of some groups on the ECOICOP5 level which are calculated outside the consumer basket. They belong to the group of centrally observed prices (sub-indices are compiled by the Consumer Prices Statistics Section of the CZSO Prague). This applies especially to the groups of goods and services with tariff prices (electricity, gas, railway transport, telecommunications, financial services) where there exists a wide range of frequently updated supply of products. For these items the method of selecting representatives applied for the consumer basket formation could result to certain index deterioration. To this end, the price development of these items is calculated independently either on the basis of entirely exhausted supply or from strongly prevailing supply of these products. Sub-indices are used in the formula for the overall consumer price index calculation and by their weight in the consumer basket (determined like for other items) they are aggregated to higher aggregates and the total. Besides the above groups the method of using of the sub-indices is applied for market rentals, imputed rentals (CPI only), prescription medicines, over-the-counter medicines and other pharmaceuticals, passenger transport by air and insurance.

Data are generally processed in ORACLE, some small, but complicated parts (e.g. indices for tariff prices) in Excel. All outputs, including intermediary, are in Excel. Excel is used for outputs, including publications. Excel is also used for intermediary outputs and for specific calculation of some sub-indices.

18.5.3. Chaining and linking method

CPI calculation:

Starting from 2018, the price base period was changed from December 2015 to December 2017. The calculated indices are chained at all levels of the consumer basket to the basic index (with index base 2015 = 100). Therefore, a multiplicative constant is used to transform the index with the base period December 2017 = 100 into an index with the base 2005 = 100. Thereby, a continuation of the existing long index time series 2015 = 100 is ensured.

CPI is chained index with bi-annual chaining.

Then, the remaning indices are derived (previous month = 100, corresponding period of last year = 100 and annual rolling average, i.e. the average of index numbers over the last 12 months to the average for the previous 12 months).

 

HICP calculation:

HICP is derived from CPI the following way:

HICP link index (base December 2017 = 100) is equal to CPI index (base December 2017 = 100) for sub-class (ECOICOP5).

HICP link index (base December 2017 = 100) for higher aggregate of COICOP classification (class, group, division, total) is calculated as arithmetic weighted average of all subordinated indices on sub-class level (HICP link index with base December 2017 = 100).

HICP is chained index with annual chaining.

 

HICP and CPI weights differ (mainly due to domestic vs. national concept and (non-)inclusion of OOH)

18.5.4. Quality adjustment

The generally used QA method is bridged overlap within EA. This means first: if a product-offer (variety) can no longer be found in an outlet, another product-offer (the same or a different variety within the same EA) is selected to replace the old one. Only if these product-offers are not considered essentially equivalent (i.e. the product-offers do not belong to the same variety or the outlet changes), this observation is effectively excluded from the index and the price change is estimated using the remaining observations. (A new base price is imputed to obtain this effect.) After this QA procedure the number of price quotations within EAs remains constant through time.

A (straight) overlap method is used for the replacement of EA (EA replaced by EA '1:1'). This overlap itself does not affect the price index (at least in formal terms) either. Typically (but not necessarily) this happens in the month of December.

On a more general level, re-sampling and replenishment procedures are possible higher up, within the COICOP 5-digit (national extension of COICOP) level, too, in that a number of EAs are replaced by a number of new EAs (EAs replaced by EAs 'm:n'). This involves changing the weighting scheme within the relevant COICOP group.

Explicit methods (mostly expert judgement) are used only in exceptional cases and are mainly used for the replacement of EA by new EA, where the overlap or bridged overlap method is not considered to be appropriate/sufficient.

Note that resampling itself, on whatsoever level, does not change the price index (generalized overlap).

Missing EA in current month is exceptional phenomena and is treated individually. Last year 15 EAs of 700 in the basket were replaced (mostly in December as planned replacements)

Quality adjustment of the price index is performed when the product which was subject to price survey is replaced by another one. The change is due to the absence of the original product in the market or decreased demand. Then the representative in the consumer basket is replaced by a similar product or product in great demand. The other, much more frequent case of substitution, takes place when the product selected by the field survey department employee for the purpose of price survey (variety corresponding with the description) ceases to be sold in the selected shop or when the shop is liquidated. The filed survey department employee shall select (being advised by the shop staff that the absence is permanent) another similar product (complying with the description) or survey prices in other shop.

 A) Direct adjustment

 A1) Direct comparison of prices (dealing with two comparable products)

New item is considered directly comparable, if: 

  • It is produced by the same manufacturer
  • It is produced from the same materials and has the same or similar technical parameters which are important for customers (use value)
  • Has the same measurement unit
  • Has the same type of package
  • The difference between the original and new items are not significant and may refer to the customer taste and their personal preferences, such as colour, design, shape, decorative elements, etc. 

If the products are considered comparable in terms of quality, then the difference in their price shall fully reflect price increase or decrease of the price index. Such method is used by the CZSO for the substitution of varieties within price index.

 

A2)   Expert estimate (dealing with 2 incomparable products)

However, in most cases the original and new products are of different quality and their prices cannot be compared directly. In such case it is necessary to adjust the price difference by quality change of a new and original product which means to express in figures which part of price difference of both products is caused by the quality change and which part represents price increase or decrease.

Information can be obtained as follows:

             - by an expert estimate of the field survey employee in collaboration with the shop staff

             - by an expert estimate of external experts

             - by the use of hedonic regressive patterns

The CZSO sometimes uses especially services of external experts during the substitution of a representative in the consumer basket. The CZSO does not so far use the last alternative because hedonic pattern requires a large-size database with a wide scope of product characteristics which demands significant expenses related to the creation and maintenance of such database.

 

B) Imputation methods (dealing with 2 incomparable products)

B1) OVERLAP method 

The overlap method is used where it is possible to observe the price of both the original and new product in the same time period (month) which is determined as an overlap. In the overlap month the prices of both products are surveyed. Price development in this month is measured on the original product, next month on a new product using its price surveyed in the previous overlap month. The price difference of the original and new products will not feed into the price index. This method is used by the CZSO for the substitution of representatives in the consumer basket (especially in the price index revision when new components are imputed into the consumer basket).

  

B2) BRIDGE OVERLAP method 

This method is used where it is impossible to survey the price of new and original component in one month. Price development of similar products which appeared in the reference as well as previous month will be assigned to the product newly included into the consumer basket. This method is used also in cases when it was impossible due to various reasons to survey the price of the component in both months (missing prices or, in contrast, newly appearing ones). The CZSO uses this method each month for adjusting of variants surveyed by the field survey employees and for adjusting of prices surveyed only in one month. 

In substitutions of representatives the development of a similar representative or group of representatives can be used as a bridge. This method is used by the CZSO in substitution of representatives in the consumer basket (especially in the revision of price indices when new components are i

   
   

mputed into the consumer basket).

 

Practical use of QA

In price index quality adjustment the most serious problem is to decide to which extent the newly include product is comparable with the original one, i.e. when to use direct price comparison and when and by which method to make the quality adjustment of prices. To this end the CZSO uses the following procedures:

 a) Substitution of a variety by the field survey employee during the data collection:

The main arbiter for the assessment of comparability during the variety change is the field survey employee who knows best both types of product is able to obtain information from the shop staff. If he/she considers the product comparable the product price is marked by “v” code (similar product). If he/she considers the difference in quality important the price is marked by “3” code (another variety). In both cases the arbiter shall specify the main characteristics of a new product in the note. This information is sent to RO in Hradec Králové where price verifiers on the basis of data in the note concerning current and previous months (or telephone questions) will verify the proposal of the field survey employee. The last supervision of substitutions and the “BRIDGE OVERLAP” method of adjustment is performed by employees of the Consumer Price Statistics Department.

 Example: For “A” representative the following price groups were surveyed in month t-1 and month t:

 

month t-1

month t

Comment

P1

100

100

 

P2

100

110

 

P3

90

150

Other variety (3)

P4

110

120

 

P5

120

110

Other variety (3)

P6

100

120

Similar product (v)

P7

80

price was not surveyed

shop closing(3)

P8

100

100

 

P9

80

130

Other variety (3)

P10

price was not surveyed

120

New shop (3)

P11

120

140

Other variety

Average price

100

120

 

 The non-adjusted index t / t-1 = 120/100 = 1,2

 

In quality adjustment using the BRIDGE OVERLAP method for the m-o-m measurement of “A” representative development only those prices were used which were comparable in both reported months. 

 

month t-1

month t

 

P1

100

100

 

P2

100

110

 

P4

110

120

 

P6

100

120

Similar product (v)

P8

100

100

 

Average price

102>

110>

> >

 Index  t / t-1 =  110 / 102 = 1,08

 

The quality adjusted price index is imputed to the “A” representative by means of the base period price change: 

 

Price in base period t-1>

IBAZ  t-1 >

IP t  unadjusted>

IP t  adjusted>

IBAZ t>

Price  t>

Price in base period t>

 >

REPR  A>

80,00>

125,0>

120,0>

108,0>

135,0>

120,00>

88,89>

 

Price in BP t-1 – price in base period of “A” representative in month t-1         80,0

IBAZ t-1  - base index of “A” representative in month t-1                              125,0

 IP t  unadjusted – m-o-m index unadjusted                                             120,0

 IP t  adjusted – m-o-m index – adjusted                                                  108,0

 IBAZ t – base index of “A” representative in month t                                 125,0 * 108,0/100= 135,0

 Price t – average price of “A” representative in month t                                                 120,0

 Price in BP t – base period price for “A” representative in month t                                           120,0/1,35 = 88,89

 or

 Price in BP ZO t – price in base period for “A” representative in month t            80,0 * 1,2/1,08 = 88,89

  

 b) substitution of a representative in consumer basket     

Substitution of representatives (EAs) in consumer basket takes place in the consumer price index revision continuously, as needed in the period between revisions. The substitution owes to a constant update of assortment in the market and to changing consumption patterns of the population. For products newly included into the consumer basket it is difficult (practically impossible) to back trace the price in base period since the product has not existed then. In such cases the new price representative follows the previous development of the original representative using the OVERLAP or BRIDGE OVERLAP method.

 Example:

 “A” REPRESENTANTIVE will be replaced by “B” REPRESENTATIVE.

 - by the OVERLAP method 

 

 

Price in BP t -1>

Price t -1>

IBAZ  t -1>

Price t>

IP t /  t -1>

IBAZ t>

Price in BP t>

REPR A>

100>

150>

1,5>

> >

> >

> >

> >

REPR B>

> >

300>

> >

330>

1,1>

1,65>

200>

  

- by the BRIDGE OVERLAP method

 

 

Price in BP t -1>

> >

Price t -1>

IBAZ  t -1>

Price t>

IP t /  t - 1>

IBAZ t>

Price in BP t>

Group of REPRESENTATIVES A1-n>

> >

> >

1,5>

> >

1,1>

1,65>

> >

REPR B

 

 

 

330

1,1

1,65

200

 

c) quantity adjustment

Quantity adjustment refers to items whose price in the period t was surveyed for other unit of measurement than in the period t-1. Quality adjustment is performed by a linear conversion to the same unit of measurement. If (upon conversion to the same unit of measurement) the price is changed due to a different unit of measurement, the following procedure depends on whether or not:

  • original package disappeared from the market (e.g. weight reduction of a chocolate bar from 50 to 40 g)
  • original package is not available in the shop store only in month t  (e.g. washing powder of the weight of 1 kg is replaced by 3 kg package)

In the first case the price change is reflected in the index as a price increase or decrease. In the second case the products are considered incomparable and the quality adjustment procedure is the same as in the variety substitution. This means that the field survey employee will assign code 3 to the surveyed price (change of variety or weight in grams) and this price difference is not included into the index.

18.5.5. Seasonal items - general information

For fruit and vegetables the prices are collected evenlyfrom the 1st to 20th day of a month, always in 1/3 of selected districts in a week. The field survey employee collects 3 prices for these items. There are no EAs in the sample, for which the price would be unavailable. (Some strongly seasonal fruit and vegetables with very limited season are excluded from CPI/HICP basket - like cherries)

Fish is not considered seasonal.Very small weight.

Clothing, footwear are seasonal - see 18.5.5.3.

Package holiday are not considered seasonal (EAs basically available all yar long)

 

 

18.6. Adjustment

Not applicable.


19. Comment Top

None.


Related metadata Top


Annexes Top
HICP Detailed Structure