Central Statistics Office, Ireland

C4: Price statistics. Purchasing power parities. Housing statistics

Consumer Prices, Central Statistics Office (CSO), Skehard Road, Mahon, Cork, IRELAND

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.

European classification of individual consumption according to purpose (ECOICOP)

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

The main statistical variables are price indices.

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

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

All target population is currently covered in the Irish HICP

3.7.1. Geographical coverage

The HICP refers to the economic territory of a country as referred to in paragraph 2.05 of Annex A to ESA 2010, with the exception that the extraterritorial enclaves situated within the boundaries of a Member State or a country are included and the territorial enclaves situated in the rest of the world are excluded.

3.7.2. Coverage error regions

No geographical areas excluded from the sample frame.

3.8.1. Start of time series

The HICP series started in January 1997.

3.8.2. Start of time series - national specifics

See the HICP database.

2015=100

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).

HICP is a monthly statistics.

Harmonised Indices of Consumer Prices (HICPs) are harmonised inflation figures required under the Treaty on the Functioning of the European Union. Regulation (EU) 2016/792 of the European Parliament and the Council of 11 May 2016 (OJ L 135) sets the legal basis for establishing a harmonised methodology for the compilation of the HICP and the HICP-CT.

This regulation is implemented by Commission Regulation (EU) 2020/1148 of 31 July 2020.

Further documentation, can be found in Eurostat’s website - HICP dedicated section, namely recommendations on specific topics, under the methodology page, and guidelines, under the quality page.

None.

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.

HICP data at ECOICOP 2-digit level is published nationally and is transmitted to Eurostat at ECOICOP 5-digit level. Individual or identifiable price data is not published.

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 Protocol on impartial access to Eurostat data for users.

The HICP is released according to Eurostat’s Release calendar.

The calendar is publically available and published at the end of the year for the full following year.

Eurostat's website: HICP Release Calendar.

The CSO disseminates CPI/HICP data on the CSO website at 11am (local time) on the day of publication (see point 8.1).

The headline CPI/HICP figures are provided to senior officials in the Office of the Prime Minister, the Ministry of Finance and the Central Bank under embargo one hour before the release of the CPI/HICP publication.
HICP data is transmitted to Eurostat under embargo, if the national CPI publication (which contains HICP data) is scheduled to be published after the deadline for transmission of data to Eurostat.

Monthly

HICP publication is included as part of the national CPI release monthly. 

This dissemination is in English.

HICP publication is included as part of the national CPI release monthly.

At national level: HICP data at ECOICOP 2-digit level are published in the Consumer Price Index monthly publication which is available on the CSO website.

HICP data is available through 'pxStat' on the CSO website.

None.

None.

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

At national level: HICP methodological notes are available with the monthly Consumer Price Index publication (background notes). A further detailed methodological description is available in the 'Consumer Price Index Introduction of Updated Series (Base: December 2011 = 100)' document which is available on the CSO website.

The following list of reports have assessed the quality of the Irish HICP/CPI in recent years:

Eurostat: Compliance Monitoring Report of 2010 and follow-up report of 2020.

National: Consumer Price Index Review Group Report March 2010

National: Standard Report on Methods & Quality for CPI/HICP April 2016

European Statistics Code of Practice

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

Eurostat carried out a HICP compliance monitoring visit in May 2017 and published a report in September 2017. A follow up report was completed in early 2020.

Price collectors were suspended since March 2020 so no verification was taking place. Previous to this audits were carried out in the field sporadically to ensure price collection was correct.

A reduced number of price collectors have gone back into the field since the end of the Covid 19 Pandemic.

All price changes are reviewed by office staff

Each item relative is then reviewed to identify outliers.

11.2.1. Compliance monitoring - last report and main results

The last available compliance or follow-up report can be found in the dedicated HICP section ‘Compliance Monitoring’ of Eurostat’s website, under ‘Methodology’.

 Compliance Monitoring

11.2.2. Quality assessment - national specifics

HICP concepts and methodology have been developed according to international standards and using consumer price statistics experience from all EU Member States. HICPs are considered to be sufficiently accurate for all practical purposes they are put into. In particular, it is the best measure of inflation for the euro area and the European Union as a whole as well as for the comparisons of inflation across countries for which it is compiled.
As with other member states, further work is ongoing to improve the quality of the index. Key priorities are the treatment of owner occupied housing (currently excluded) and greater harmonisation of methods for quality adjustment and sampling.

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

The users of the CPI/HICP data are as follows:

• European Commission (Eurostat) uses the data to meet legislative requirements.
• Central Banks e.g. National Central Bank, ECB and other Central Banks use the data for monetary policy development.
• Government Departments e.g. Department of Finance, Department of the Taoiseach (Prime Minister), Department of Public Expenditure & Reform, Department of Social Welfare, Revenue Commissioners use the data for national policy development.
• Economists, Analysts e.g. Economic & Social Research Institute (ESRI) and stockbrokers use the data as a general macroeconomic indicator.
• The Court System uses the data for indexation of court awards e.g. maintenance and disability payments
• Businesses uses the data to help price their products.
• The general public use the data as a general measure of cost of living increases.

One of the recommendations from the National Consumer Price Index Review Group (March 2010) was Recommendation 18.

• The introduction of socioeconomic price indices (including income deciles/quartiles) is considered to be a priority and the CSO should carry out further research in this area. 

No information.

The full set of HICPs and HICP-CT at ECOICOP 5-digit level, are transmitted to Eurostat each month.

The accuracy of source data is monitored by assessing the methodological soundness of weight and price sources and the adherence to the methodological recommendations. The Household Budget Survey (HBS) is the main source for weights every five years while National Accounts data is used for annual updating. Local price collection (visits to local retailers and service providers) and central price collection (post, telephone, e-mail and the internet) are the data sources for prices. The items selected for pricing and the method selected for price collection reflect both consumer choice and behaviour. The type of survey and the price collection methods ensure sufficient coverage and timeliness.

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.

Numerical estimates of the HICP sampling errors are not produced by the CSO. The CSO try to reduce sampling errors by using a sample of consumer prices that is as large as possible given resource constraints.

Non-sampling errors are not quantified. The CSO try to reduce non-sampling errors through continuous methodological improvements and survey processing improvements (e.g. a new Electronic Data Capture system was introduced by the CSO for local price collection in 2016).

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.

Since the March 1997, launch of the HICP release, the HICP for the country groups aggregates has always been published on the dates announced in Eurostat’s Release calendar.

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 data are considered to be comparable over time. There have been several improvements in methodology since HICP was introduced with the aim of improving reliability and comparability of the HICP. These changes may have introduced breaks in time series. However, back calculations under the newer standards were performed when appropriate basic data was available.

Differences between the HICP and national CPI
The following expenditure is included in the HICP but excluded from the national CPI: Non available.
The following expenditure is included in the national CPI but excluded from the HICP: mortgage interest, union subscriptions, motor car tax, motor cycle tax, building materials, motor car insurance (non-service), home insurance - contents (non-service) and home insurance - dwelling.

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

Not available

The HICP series, including back data, is revisable under the terms set in Articles 17-20 of Commission Implementing Regulation (EU) 2020/1148.

17.1.1. Data revision - policy - national specifics

The national CPI is not subject to revision. HICP series, including back data, are revisable under the terms set in Commission Regulation (EC) No 1921/2001 of 28 September 2001. The published HICP data may be revised for mistakes, new or improved information and changes in the system of harmonised rules.

The HICP back data (HICP and HICP-CT) were revised marginally in 2016 due to the change in methodology for referencing the HICP data to 2015=100 (compared to 2005=100). 

The national CPI has never been revised as per the revisions policy.

18.1.1. Weights

National Account t-2 is used as starting point. Adjustments to t-2 data is then made using detail available in National Account quarterly data for t-1 Q1-Q3 only. Further adjustments are then made using retail/credit card data to items not identified in quarterly data. This involved multiplying the t-2 value by an indicator of the change in expenditure based on these data sources.

Elementary Aggregates propositions are defined by latest HBS. These were adjusted in some cases to reflect previous year.

18.1.1.1. Compilation at elementary aggregate level

Weights are generally not adjusted at the elementary aggregate level on an annual basis, however, they the weights at the 4-digit level of ECOICOP are reviewed and updated annually and weights at the 5-digit level are recalculated each year on a pro rata basis using the structure of the most recent HBS.

18.1.1.2. Compilation of sub-index weights

National Account t-2 is used as starting point. Adjustments to t-2 data is then made using detail available in National Account quarterly data for t-1 Q1-Q3 only. Further adjustments are then made using retail/credit card data to items not identified in quarterly data. This involved multiplying the t-2 value by an indicator of the change in expenditure based on these data sources.
Adjusted data is then price updated to t-1. Majority of adjustments are made at 4-digit level and proportions remain the same at detail below this based on latest HBS.

National Accounts Annual Expenditures t-2. Adjustments made using NA t-1 quarterly data Q1-Q3 only. Further adjustments using retail/credit card data t-1. 

Q1-Q3 are used for adjustments. Q4 is not available in time to be included in the adjustments.
This is equivalent to assuming that Q4 is equal to the average of the first three quarters.
Some adjustments were made based on other statistical sources for items that would increase significantly in Q4 in previous years.

18.1.1.3. Compilation of sub-index weights

2021 National Accounts data and Quarterly 2022 National Accounts data

18.1.1.4. Weights – plausibility checking

No plausibility checking of weights currently

18.1.1.5. Price updating

T-2 data is price updated to make the expenditure shares representative of t-1.
The average index for t-2 is calculated at 4-digit level, this is then compared to the Dec t-1 index. The change between these two periods is then applied to the adjusted expenditures to ensure price updating to December t-1.
Price updating is done at 4-digit level. E.g. 01.1.1 Bread and Cereals, 01.1.2 Meat and 02.1.3 Beer etc.

18.1.1.6. Compilation of total household final monetary consumption expenditure

T-1 quarterly data from National Accounts is used to adjust T-2 annual expenditures. Where there is no quarterly information available, t-2 data is updated based on t-1 indexation and other statistical sources.
Q1-Q3 are used for adjustments. Q4 is not available in time to be included in the adjustments. This is equivalent to assuming that Q4 is equal to the average of the first three quarters.

18.1.2. Prices

Price data is based on Survey data

18.1.2.1. Data Source - overview  

Prices are collected from multiple sources. These include in store, online, directly from retailers and some webscraping. These are complimented with 3000 collected centrally primarily for services

18.1.2.2. Scanner data - general information

We currently use 2 sources of scanner data in our CPI/HICP calculations. These were developed during the pandemic and we hope to expand the use of scanner data to all major grocery retailers by the start of 2024. We are currently undertaking a methodological review of how we use this scanner data and hope to have the recommendations in place for 2024.

For more information on the scanner data project, please see the the document The Scanner Data Project in CSO', on CSO's website.

18.1.2.3. Web scraping - general information

Webscraping has occurred during the pandemic as a proxy for physical in store price collection. This has mainly occurred for supermarkets and multi-item stores. 

No foreign websites are scraped

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

The domestic concept of household final consumption expenditure is used therefore the expenditure of all households irrespective of nationality or residence on the economic territory of Ireland is covered. The definition of the economic territory is identical to the definition of economic territory given by the ESA framework.  To ensure the State is fully represented, the country is divided into 8 Nomenclature of Territorial Units for Statistics 3 (NUTS 3) regions. The regions are combined into 5 areas: Dublin; South West; Border, Midland and West; Mid-West and Mid-East and South East regions. Purposive (or judgmental) sampling is then applied, whereby Dublin and the regional cities (Cork, Limerick, Waterford and Galway) are automatically included in the sample while a sample of towns (locations) are selected from the remaining strata with the constraining factor that each county in the State must be represented. As of December 2016, there are 84 cities and towns in the CPI sample of locations

18.1.3.2. Sampling design: outlets

Outlets are selected for both central price collection and local price collection in similar ways. 

A purposive sampling approach is applied to select the sample of retail outlets within a location (i.e. retail outlets are chosen which are the most popular). These are selected mainly by office-based staff.  However, local knowledge is also supplied by the price collectors in the field. 

Central price collection is typically used where national pricing applies (e.g. health insurance), or where local price collection would not be suitable. There are 137 item headings for which prices are collected centrally through postal, e-mail, telephone enquiries along with internet price collection. Of these 129 item headings are used in the compilation of the HICP.

18.1.3.3. Sampling design: newly significant goods and services

There has been no additional products added since the last rebase which came into effect from January 2017. 

Then items such as Avocados, Electronic cigarette refills/liquids and larger TV's were added and items such as Clock Radio and Deep Fat Fryer were removed.

Price data is collected every month.

18.3.1. Price collection surveys

Direct price collection is undertaken by a specially recruited team of 30 price collectors using Electronic Data Capture (EDC) handheld devices, who visit retail outlets on a monthly basis.  In 2016, we introduced a new system of EDC which has improved the accuracy and efficiency of the system. This entailed the replacement of each handheld device (moved to new smart phones) and the adoption of new software which has allowed for the implementation of better quality checks in the field at the point of price collection. Approximately 12,000 price quotations are gathered through direct price collection every month. 

This data is complemented with price files receive from large retailers, manual online pricing and some webscraped data.

In addition, 137 special inquiries covering items such as utility charges and services are conducted by post, telephone and e-mail in conjunction with internet price collection by centrally based staff.  Approximately 3,000 prices are collected in this way every month.

The price collectors in the field are on fixed term monthly contracts.  They are recruited and trained directly by CPI office-based staff.  A Price Liaison Officer (PLO) trains the price collectors and conducts follow-up checks to ensure high data quality.  In 2016, during the implementation of the new system of EDC, we held two sessions with all price collectors to train them on the operation of the new technology. For each session, the price collectors were organised into groups of 10 and meetings were held in different locations around the country. This was a very time consuming exercise but was extremely useful in order to interact directly with the price collectors in the field.

CPI office-based staff are full employees of the CSO and are trained according to normal procedures.

18.3.2. Timing of price collection

The reference day for pricing was the second Tuesday of each month up to 2010. Since February 2010, prices are collected over a period of more than one working week, i.e. Monday prior to the second Tuesday of the month up to and including the third Tuesday of the month. This was necessary to meet the requirements of Council Regulation (EC) No. 701/2006 regarding the temporal coverage of price collection in the Harmonised Indices of Consumer Prices (HICP).

Similar to other products in the basket, the prices for energy products and fresh fruit and vegetables are collected over the period of more than one working week.

Controls on quality of the data
Prices are collected with detailed product descriptions and indicators of sales, multiple offers etc. The prices returned are initially scrutinised, visually checked and finally edited (both micro- and macro-edits are applied, checking price ratios for individual items, elementary aggregates and higher levels of aggregation).

18.4.1. Data validation - price data

Data Checks

The most important data check is price change. The price recorded is compared (i.e. validated) with the price for the same product in the same retail outlet in the previous month. Prices outside the relevant price range are re-checked by CPI staff to determine inclusion or exclusion for the purpose of the CPI compilation for that month.

Once the price data is correct and complete, preliminary item indices are calculated using the prices, which passed the data checks, plus those that have been manually accepted. These preliminary item indices are in turn checked to ensure price changes have been correctly reflected in the calculations.

Both micro- and macro-edits are applied, checking price ratios for individual items, elementary aggregates and higher levels of aggregation.

Data Collection - Field audits

To check that price collections are carried out correctly, CPI personnel carry out monthly quality audits on individual local price collections. There are two types of quality audits. The first involves an auditor accompanying a price collector on a price collection. The second consists of audits, which take place no later than three days after the price collection (back check), where an auditor repeats the price collection to determine if the price collector has collected the correct prices. Multiple locations are visited each month and price collectors do not know in advance which locations will be chosen for the quality control checks.

Data Collection – Central Price Collection

CPI headquarters staff manually enters data collected from service providers (via post, e-mail and telephone enquiries along with internet price collection) into Excel files.  Any implausible or erroneous data highlighted after the above data checks is validated by requesting confirmation from the retail outlet or service provider. If confirmation, is not received the price is removed from the calculations.

Generally, extreme price changes are accepted unless the price change is implausible.  Specific rules apply for clothing and footwear.  If the price of a clothing product drops by more than 60%, the presumption is that this item is a clearance item and it is excluded from the aggregation. Also if the price falls two months in a row, it is presumed that the product is a clearance item and the price is estimated back to the pre-sale price. 

When prices are recovering from sales, generally, we would accept the price recoveries even if the price was substantially greater than the pre-sale prices.  Exceptions apply here again for clothing and footwear and electronic goods.  A recovery price is accepted only 50% greater than the original pre-sale price for clothing and footwear and 20% greater than the original pre-sale price for electronic goods. 

Aggregation and Compilation

There are detailed procedural notes for the compilation of the CPI and HICP using the statistical software package of SAS. Within these procedures, a system of 'quality gates' is used. This ensures that certain checks are completed systemically at each stage of the compilation before it is possible to move onto the next stage of compilation.  For example, when the prices are being imported into SAS from the SQL database, an output file is produced analysing the number of prices collected for each item in the basket. If the number of prices is implausible, then further investigation must take place.

Dissemination

The dissemination process has been automated in SAS to reduce the human input to the minimum. Again, this process is controlled through a set of detailed procedures using a system of 'quality gates' similar to that described for aggregation and compilation. The security of the folder(s) used for dissemination are also tightly monitored with IT using access controls.   

18.5.1. Elementary price index formulae

The HICP is a Laspeyres-type index. Jevons price index (ratio of geometric means) is used for the elementary aggregate formulae.

We use two decimal places for regular price observations. Weights are defined up to 0.001 parts per thousand. Index figures are compiled with full precision (only constraint is the limit on decimal places in SAS) and transmitted with five decimal places. Index figures and rates of change are published with one decimal place. We apply rounding on the indices before publishing. Rates of change are compiled using rounded indices.

18.5.2. Aggregation of different data sources

The first step of the calculation process for the 478 directly priced item headings is the calculation of area average prices. For CPI purposes, the sample of locations is divided into the eight NUTS 3 regions. These regions are combined into 5 CPI pricing areas as follows:

• Dublin
• South West
• Border, Midland and West
• Mid-West and Mid-East
• South East

The prices for each item heading are divided into the five areas. An area average price is calculated as the geometric mean of the prices within the given area, e.g. the average price for 1 litre of low fat milk in Dublin is the geometric mean of the prices for 1 litre of low fat milk collected in the various retail outlets in Dublin. The area average price is technically known as an elementary aggregate as it is the lowest level of calculation within the CPI. Each month, an area average price is calculated both for the current month and the previous month based only on matched price observations between the two periods.

For the remaining items collected centrally, these are not aggregated at area/regional level. 

All aggregation and further processing is completed in SAS (www.sas.com).  The production process is arranged in SAS projects and access is tightly controlled.  Changes to the code are only made by the Statistician in the area. The SAS projects are run by CPI staff on a monthly basis.

MS Excel can be used at data collection but not during aggregation.  Output for transmission to Eurostat is output in text files. 

18.5.3. Chaining, linking and splicing methods

From a weights perspective, indices in year y are based in December of year y-1. The resulting indices are chained using the December month as the chain link

18.5.4. Quality adjustment – Detailed information

Whenever a product has to be replaced by another product, some statistical adjustment has to be made in order to link the price indices and create continuous price series. In principle, this situation may happen for any product covered in the HICP.

In most cases, we apply the 'Bridged-overlap' method (implicit QA). This approach consists in estimating a price development between the replaced product and the replacement product which is equal to the actual average price development (geometric mean) observed for the products belonging to the same consumption segment. In duly motivated circumstances, we may also apply direct comparison (if the two products are deemed to be almost identical) or link-to-show-no-price-change (if no reliable quality adjustment method can be applied).

In all COICOP divisions Bridged-overlap is the dominant method of implicit QA. Explicit quality adjustment tends to be avoided.

Direct Comparison normally occurs on items such as CD's and DVD's. 

18.5.5. Seasonal items

Currently there are no seasonal products included in the basket for HICP.

Not applicable.

None.