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National reference metadata

Finland

Reference metadata describe statistical concepts and methodologies used for the collection and generation of data. They provide information on data quality and, since they are strongly content-oriented, assist users in interpreting the data. Reference metadata, unlike structural metadata, can be decoupled from the data.

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Harmonised index of consumer prices (HICP) (prc_hicp)

National Reference Metadata in Euro SDMX Metadata Structure (ESMS)

Compiling agency: Statistics Finland (SF)

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The harmonised index of consumer prices (HICP) is a consumer price index (CPI) that is calculated according to a harmonised approach. It measures the change over time of the prices of consumer goods and services acquired by households (inflation).

Due to the common methodology, the HICPs of the countries and European aggregates can be directly compared.

19 July 2023

The main statistical variables are price indices.

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

HICP is a monthly statistics.

Some  commodity level accuracy figures have been calculated and the results are taken into account when deciding the number of price observations for each commodity. The bias in weights is the bias due to the small samples in HBS, especially for region Åland.  Bias is neglectable because regional weight for Aland is under one 1% of all regions. The regional weights are derived mainly using the HBS. There is only one exception to this and it is class 04.1.1 Actual rentals paid by tenants that is estimated based on Housing statistics / value of rental housing.

The Consumer Price Index is always based on some kind of a sample of the products and services available to consumers. The randomness of the samples is reduced by the fact that the statistics are based on panels. The use of a panel ensures that the produced price changes are accurate enough.

Following sources for bias may be identified:

  1. substitution bias:
    • The Laspeyres fixed-weight index formula does not include any change in consumption due to a change in relative prices. For example, if the price of chicken drops in proportion to beef, the demand for chicken will rise as the demand for beef falls. An index that uses the weights of the comparison period does not take this into account.
    • The magnitude of the substitution bias depends on the households’ reaction to the change in prices and the magnitude of the price changes. The less frequent the adjustment in the index weight structure, the greater the substitution bias.
    • The substitution bias is not estimated as being very significant at the overall index level.

  2. bias caused by new products:
    • A Consumer Price Index using comparison period weights may be particularly prone to bias when new products, such as consumer electronics, enter the market. If prices fall abruptly and this causes a great rise in demand, a fixed-weight index is not, perhaps, capable of taking this into account sufficiently quickly. In such cases, a single product may have a noticeable effect on the year-on-year change in the Consumer Price Index.
    • new products are included in the index once a year as weights are updated or when it is necessary to replace vanishing products with new one. Thus new products will probably not form an essential source of bias

  3. bias arising from the outlet sample:
    • The sample of outlets in the Consumer Price Index is checked and updated annually. Within a year, the selected outlets will remain the same throughout the index calculation If households start to favour a certain type of outlet, such as big hypermarkets instead of smaller shops, this can be a potential source of bias if the price development of products differ in different types of outlets.
    • this bias is not likely to be considerable as more and more transaction data (scanner-data) is introduced to the production of HICP/CPI.
    • Also the outlet sample is revised and updated annually. The significance of the bias arising from the retail outlet sample is not likely to be very high in the Finnish Consumer Price Index, which draws on quite a large number of outlets (around 2,000) in proportion to the country’s size. Moreover, outlets that close down are replaced with new ones, taking into account the market situation of the collection area. A change of a collection outlet does not cause a change in the index

  4. bias caused by quality change:
    • Any changes in the quality of goods and services are carefully examined when products are replaced due to the removal from the outlet’s selection OR due to the fact that product is outdated and need to be replaced by a new model that better represents the product group in question. 

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).

Monthly

The full set of HICPs is published each month according to Eurostat’s Release calendar, usually between 15 and 18 days after the end of the reference month.

Each year, the January release is published at the end of February to allow for the annual update of the weights, both 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.

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

To this end, concepts and methods have been harmonised by means of legislation. HICPs that deviate from these concepts and methods are deemed comparable if 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 (Article 4 of Council and Parliament Regulation (EU) 2016/792).

HICP comparability over time is ensured. There are not any statistical breaks in the HICP series due to changes in the methods.

Changes in the consumption and shopping habits are incorporated every year.