National Statistical Institute of Luxembourg (STATEC)

Price Statistics (SOC 4)

STATEC
Centre Administratif Pierre Werner
13, rue Erasme
B.P. 304
2013 Luxembourg
LUXEMBOURG

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

There is no national deviation from the statistical target population as described under 3.5.1.

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 parts of the country are excluded.

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.

HICP results are send to Eurostat. The national CPI results are send to the OECD.

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.
Article 16 of the 'Loi du 10 juillet 2011 portant organisation de l'Institut national de la statistique et des études économiques'

Article 16 of the 'Loi du 10 juillet 2011 portant organisation de l'Institut national de la statistique et des études économiques' guarantees the non-disclosure of confidential data during the dissemination of statistical results. The data used for the production of statistics are considered confidential when they allow the identification, directly or indirectly, of a natural or legal person or involve a risk of disclosure of individual information. Under no circumstances may individual information be disclosed. 

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.

The release calendar can be consulted on STATEC's website:
https://statistiques.public.lu/en/agenda/calendrier-diffusion-2023.html

Data on Harmonised Consumer Prices (HICPs) are sent for information to the members of a special index commission ('Commission de l'indice des prix à la consommation') under embargo, two days before the official release of data.

The mission of that commission is to give an opinion from a technical point of view on the monthly establishment of the consumer price index and to supervise its compliance with national and Community regulations. For this purpose, it is entitled to all the necessary information provided that this does not compromise the safeguarding of statistical confidentiality.

Monthly

HICP data is made available in an Excel file that contains the indices for the current month, the previous month and the same month of the previous year at different levels of aggregation. This data is made available together with the release of the national CPI. There is no Flash estimate for the HICP which is published on a national level.

A news release for the national CPI is available on STATEC's website:
https://statistiques.public.lu/en/actualites.html

No news release is published for the HICP.

The monthly HICP (as well as the national CPI) indices are published once a special CPI committee has discussed the results. The publication is called: 'Indicateurs rapides — Série A1 bis : Indice des prix à la consommation harmonisé (IPCH)' and is available at:
https://statistiques.public.lu/fr/themes/economie-finances/indicateurs-court-terme.html

Data are published for the twelve ECOICOP divisions and 43 groups (3-digit ECOICOP).

HICP database.

In principle there is no access to micro-data. Under certain circumstances, access can be granted to individual price quotes for research purposes.

The results of the HICP at a finer level of detail are available on the homepage of the Statistical office of the European Union.

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

Methodological notes concerning the HICP and the national CPI can be found on STATEC's website:

https://statistiques.public.lu/fr/services-public/methodologie/methodes/economie-totale-prix/ipc.html

None.

The European Statistics Code of Practice sets the standard for developing, producing and disseminating European statistics and in particular the HICP.

Specific Quality assurance provisions are included in the HICP Framework Regulation (EU) 2016/792.

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

Quality assurance is done during the price collection by thresholds in the IT price application. Collectors can correct or validate the prices if the price variation exceeds a certain threshold. The IT application only performs the calculation of the HICP / national CPI if the data is complete. At the end of the price collection, a quality check is done in order to confirm the most important price variations.

A special CPI committee ('Commission de l'indice des prix à la consommation') is set up by law, comprising the principal social partners and experts in index numbers and from the central bank. All the methodological aspects are discussed in this committee. Every month it examines retail prices recorded and indices. The mission of the Commission is to give an opinion from a technical point of view on the monthly establishment of the consumer price index and to supervise its compliance with national and Community regulations. For this purpose, it is entitled to all the necessary information provided that this does not compromise the safeguarding of statistical confidentiality.

The annually fixed weight scheme is, additionally to the special index committee also discussed in the national Economic and Social Council ('Conseil Economique et Social'), another Committee composed of experts and social partners, before it is approved by the Government and becomes a regulation.

11.2.1. Compliance monitoring - last report and main results

The last available compliance or follow-up reports can be found in Eurostat's website, in the HICP dedicated section, webpage Quality - Harmonised Indices of Consumer Prices (HICP) - Eurostat (europa.eu).

11.2.2. Quality assessment - national specifics

Methodological support from an external consultant is provided on a yearly basis in order to improve different categories of the HICP / national CPI. The consultant formulates several recommendations, which are then implemented in production.

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 HICP and the national CPI have a variety of uses:

• Automatic wage indexation system ('Echelle mobile des salaires');
• Social benefit and contract indexation;
• Input to economic forecasting and analysis;
• Measuring specific price trends;
• Accounting purposes and deflating other series.

User satisfaction studies are regularly conducted by STATEC. Latest: 2021.

See webpage: Enquêtes de satisfaction et de confiance auprès des utilisateurs - Statistiques - Luxembourg (public.lu)

All ECOICOP indices at 5-digit level (for both HICP and HICP-CT) are produced, except those which were assigned a zero weight.

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.

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.
No numerical estimates of the HICP sampling error are available because they are difficult to quantify due to the complexity of price index structures and due to the common use of non-probability sampling.

For the HICPs non-sampling errors are not quantified. Eurostat and the NSIs try to reduce non-sampling errors through continuous methodological improvements and survey process improvements which can help avoiding coding and typing errors.

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).

Overall, HICP data are 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.

• Treatment of price reductions has been changed in January 1999. The following ECOICOPs were affected: 02
• The frequency of price collection for package holidays has been changed in January 2009. The following ECOICOPs were affected: 09.6
• Treatment of seasonal series has been changed in January 2011. The following ECOICOPs were affected: 01.1.6, 01.1.7, 03.1.2
• The adjustment for second-hand cars has been changed in January 2017. The following ECOICOPs were affected: 07.1.1.
• Scanner Data (Jevons Index) was introduced in the compilation of the HICP in 2018 for Division 01, with the exception of seasonal products (fresh fruits and fresh vegetables), for several shops who provide data. The rest of the prices are manually collected. For more information: The use of Supermarket Scanner data in the Luxembourg Consumer Price Index
• A multilateral Price Index method for Scanner was introduced in January 2021. For more information: The Implementation of a Multilateral Price Index Method for Scanner Data in the Luxembourg CPI
• Fresh fruits and fresh vegetables, as well as alcoholic beverages (except vine) are included in the calculation of Scanner Data from 2023 onwards.

The HICP has been re-referenced to 2005=100 in January 2006.

The HICP has been re-referenced to 2015=100 in January 2016.

There is no difference in terms of coverage of goods and services between the HICP and the national CPI. The difference is solely in the target population. The HICP covers expenditures made by households on the national territory whereas the national CPI covers expenditures made only by resident households on the national territory.

In particular, Article 1 of the national CPI regulation states that the HICP and the national CPI are identical in terms of methodology except for the difference in coverage of the target population:

« En complément à l’indice des prix à la consommation harmonisé (IPCH), le STATEC établit un indice des prix à la consommation national (IPCN), qui se conforme aux mêmes principes et concepts méthodologiques. Toutefois, la couverture géographique de l’IPCN se limite à la seule population résidante; elle exclut la consommation des non-résidents. »

I.e., 'In complement of the HICP, STATEC stablished a national CPI, in accordance with the same principles and methodological concept. Notwithstanding, the geographic coverage of the national CPI only takes into account the residents; consumption made by non-residents is excluded.’

The difference in the coverage of the two indices is taken into account by compiling a different set of weights. The weights for the HICP include the expenses of the non-residents while for the CPI the weights include all the expenses made by resident household within the country or abroad, therefore Article 2 the national CPI regulation states that the HICP and the CPI have different weights at the elementary level:

« Chacune des positions de référence de la liste commune des biens et services entrant dans le calcul de l’IPCH et de l’IPCN est affectée de deux coefficients de pondération, dont l’un est propre à l’IPCH et l’autre à l’IPCN. »

I.e., ‘Each one of the reference positions of the common list of goods and services which are taken into account in the HICP and CPI are subject to two weight coefficients, one for the HICP and the another for CPI.’

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 HICP and the national CPI are not revised.

No index revisions; the data are final when first released.

18.1.1. Weights

The weights are estimated by the National Accounts. The underlying concept is Household Final Monetary consumption expenditure. The main data source for the National Accounts is the continuous Household Budget Survey, but also other sources are used.

Weights are updated every year, at the beginning of the year, for each level of aggregation.

18.1.1.1. Compilation at elementary aggregate level

The 6-digit level is mainly derived by distributing the expenditure of the sub-class using the shares obtained from the yearly HBS.
 
The main source is the HBS but other sources are also used.
 
The 6-digit weights are updated every year.
 
There are no regional weights.
 
Weights are defined at least at the 6-digit level. Below the 6-digit level, product or outlet weights can be used.
 
The main data source for outlet weights is turnover data obtained from SBS or from business registers. Data sources for products (below the 6-digit level) are obtained from a variety of sources. In general, a judgement must be made on how to distribute the 6-digit weight over the sampled products.

18.1.1.2. Compilation of sub-index weights

Expenditure shares at sub-index level are derived from national accounts. In the case of large changes in consumption expenditures, as since 2020, annual national accounts expenditure data from the year t-2 are made representative for year t-1 mainly using the last four available balanced quarterly national account expenditure data. By the end of December of t-1, the last available data covers the third quarter of t-1. In Luxembourg, first estimations of t-1 quarterly national accounts correspond to extrapolated annual t-2 national accounts using either available short-time indicators or the same type of source as for annual accounts (direct estimation). For heavily affected segments (food, tourism, restaurants, etc), adjustments were made with available data (scanner data for division 01, overnight stays, number of passengers transported by air, HORECA statistics, etc.) to ensure the data are fully representative for 2023.

In general though, t-2 national accounts expenditure data is deemed to be representative for t-1 expenditure shares and no further adjustments, except price-updating, are done.

All weights at sub-index level are derived from the national accounts. In general, no sub-index level weights are adjusted.
In general, the t-2 annual household budget survey (HBS), conducted by STATEC, is the main source for following ECOICOP divisions:

• 01: Food and non-alcoholic beverages
• 03: Clothing and footwear
• 05: Furnishings, household equipment and routine maintenance of the house
• 08: Communication
• 09: Recreation and culture
• 12: Miscellaneous goods and services

For the other ECOICOP divisions, the main sources for compiling the t-2 household final consumption expenditure aggregate are the following:

• Administrative data provided by tax administration for 02: Alcoholic beverages, tobacco
• Administrative data and data provided by a survey on rents for 04: Housing, water, electricity, gas and other fuels
• Administrative data provided by Social Security Administration for 06: Health
• Administrative data related to fuel consumption, HBS and modelling for others for 07: Transport
• Administrative data for 10: Education
• Data provided by HORECA statistics for 11: Restaurants and Hotels

In the case of large changes in consumption expenditures, as since 2020, quarterly national accounts are mainly used to make this data representative for t-1.

Consumption expenditures for the 2023-weighting scheme thus refer to the period 2021Q4-2022Q3, as data for the last quarter 2022 is only available in February 2023.

Quarterly national accounts mainly use turnover indicators for all available NACE breakdowns to estimate expenditures for COICOP divisions 01 Food and non-alcoholic beverages, 03 Clothing and footwear, 08 Communication, 09 Recreation and culture, 10 Education, 11 Restaurants and Hotels and 12: Miscellaneous goods and services.

For the other divisions, data sources are principally the same as for annual accounts.

18.1.1.3. Compilation of sub-index weights

The weights usually refer to expenditures from the year y-2. In the case of large changes in consumption expenditures, as since 2020, annual national accounts expenditure data from the year t-2 are made representative for year t-1 mainly using the last four available balanced quarterly national account expenditure data.

18.1.1.4. Weights – plausibility checking

An internal checking of the annually fixed weight scheme is done together with the experts from NA and HBS before discussing the weights in a special CPI committee ('Commission de l'indice des prix à la consommation'). This committee is set up by law, comprising the principal social partners and experts in index numbers and from the central bank. The weighting scheme is also discussed in the national Economic and Social Council ('Conseil Economique et Social'), another Committee composed of experts and social partners, before it is approved by the Government and becomes a regulation.

18.1.1.5. Price updating

In general, 6-digit level expenditures of year t-2 are price-updated to December of year t-1 according to the following formula:

[expenditure of t-2] * [Price index of December of year t-1] / [Average price index of t-2]

The price updated expenditures are then normalized, which means that the sum of the weighting coefficients equals 1000.

For 2023, the expenditures of t-2 are not considered to be representative due to the COVID-19 situation. The reference period for the 2023 HICP weights is therefore 2021Q4-2022Q3 and expenditures related to this period are price-updated to December 2022 using the same type of formula with a different reference period.

18.1.1.6. Compilation of total household final monetary consumption expenditure

Data sources and compilation methods for computing the total Household Final Monetary Consumption Expenditure (HFMCE) are the same as for the computation of the 6-digit expenditures in scope of the HICP, see section 18.1.1.3. The total Household Final Monetary Consumption Expenditure corresponds to the sum of all 6-level expenditures in scope of the HICP.

The reference period is 2021Q4-2022Q3, as data for the last quarter 2022 is only available in February 2023. Expenditure data for Q4 2021, outside the most heavily impacted segments of consumption, is largely considered to be representative for Q4 2022. The same adjustments for tourism and restaurants were made for HFMCE as for the weights.

18.1.2. Prices

The prices data is largely based on surveys. For some products, also other sources are used (Administrative sources and Scanner data).

18.1.2.1. Data Source - overview  

The prices data is largely based on surveys. For some products, also other sources are used (Administrative sources and Scanner data).

18.1.2.2. Scanner data - general information

Since 2018, Scanner Data is used in ECOICOP 01 for three retailers representing total market share of 60%, using the 'dynamic basket' method for Division 01, with the exception of seasonal products (fresh fruits and fresh vegetables).

Since 2021, a multilateral method is used for Scanner Data ('GEKS HASP' on 25 months’ window setup).

In 2022, two more retailers were added in Scanner Data production.

In 2023, another retailer was added. Fresh fruits, fresh vegetables and alcoholic beverages (except vine) are included in the calculation of Scanner Data.

18.1.2.3. Web scraping - general information

In production, we are dubbing a manual price collection (pre-defined basket) (targeted web scraping) for one shop (electronic goods).

For research purposes, we are scraping the whole webpage with all available information (bulk web scraping).

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

There is no explicit geographical stratification that is being used. Due to the small size of the country, shops are accessible from across the country.

18.1.3.2. Sampling design: outlets

In general, outlets are selected in a purposive way. There is no explicit outlet-type stratification which is being used. In principle, prices can be collected in any outlet-type.

18.1.3.3. Sampling design: newly significant goods and services

In general, at the end of every year individual varieties are continuously updated through replacements.

E-bikes are included since 2021 (COICOP 0713).

In 2022 a new COICOP level 4 class was introduced: CP08304 Bundled telecommunication services. Music and videa streaming is included since 2022 (COICOP 09423).

In 2023:

• Disposable face masks (COICOP 06129)
• Robotic hoover (COICOP 05315)
• Disinfectant gel (COICOP 06129)

Price data is collected every month.

18.3.1. Price collection surveys

There is only one central office directly employing a team of price collectors. The price collector is responsible for selecting a specific variety in a specific outlet, taking into account the product specifications. In general, the price collector should select a well-sold product, which is likely to be available over a longer period of time and to make replacements within the same segment. The price collector also makes an assessment if the old and the new varieties are comparable or not.

18.3.2. Timing of price collection

Prices are collected between the 1^st and the 21^st of each month.

Validation procedures are in place to check the prices data that has been collected and entered into the compilation system.

The resulting price indices are examined at different levels of aggregation. The plausibility of the results is confirmed based on different factors, such as past behaviour of the series, seasonal patterns, administrative changes, sales.

Specific procedures are in place to validate the Scanner Data used in the HICP compilations.

18.4.1. Data validation - price data

When entering the data into the database, large changes in prices are directly identified (use of thresholds). Similarly, for prices collected with the electronic devices, the same procedure applies. Flags are used to provide explanations for strong price changes.
 
Within an Elementary Aggregate, the largest price changes are scrutinised.
 
Impact calculations are performed at different levels of aggregation in order to identify those products that influence the result most (upwards or downwards).
 
Monthly and yearly rates for different levels of aggregation are ordered.
 
In case of known changes in the market or following administrative changes, results are closely monitored.
 
The price statistics at STATEC unit is in close contact with the unit at STATEC in charge of economic analysis.

18.5.1. Elementary price index formulae

The Luxembourg HICP is Laspeyres-type index. For elementary aggregation, the Jevons price index (ratio of geometric means) is used.

• The following rules are used for the number of decimals:
  Price observations: 4 decimals
• Weights (per thousand): 1 decimal
• Compilation and transmission of indices: >10 decimals
• Publication of indices: 2 decimals
• Rates of changes: compiled from the indices with 2 decimals

18.5.2. Aggregation of different data sources

At the lowest level, the Jevons index is used (unweighted geometric mean of price relatives), by comparing the price of the current month to the price of the December month of the previous year. For the elementary indices compiled with Scanner Data, prices of the current month are compared to prices of the last available 25 months ('GEKS HASP' on 25 months’ window method (based on GEKS formula)). These short-term indices are then multiplied in order to obtain a long-term series that starts in December of the previous year.

The elementary indices (100 = Dec y-1) are then aggregated upwards using fixed annual weights, using the following structure of the HICP:

Level 0 / General 

            Level 1 / General  (ECOICOP – Divisions)

                        Level 2 / General (ECOICOP – Groups)

                                   Level 3 / General (ECOICOP – Classes)

                                               Level 4 / General (ECOICOP Sub-classes)

                                                           Level 5 / General (ECOICOP Positions)

                                                                       Level 5_a / Non Scanner Data

                                                                                  Level 6 / Representative items

                                                                       Level 5_b / Scanner Data

                                                                                   Level 6 / Retailer

18.5.3. Chaining, linking and splicing methods

From level5/General/ECOICOP upwards, the indices are chain-linked using the December month as the overlap period in order to obtain long-term series that are expressed as 2015=100. Technically the indices (at each level) are multiplied by a chaining coefficient which corresponds to the index (100=2015) for that level divided by 100.

18.5.4. Quality adjustment – Detailed information

In most cases, the following methods are used in case of replacements:

• Bridged overlap
• Overlap pricing (in case the price of t-1 of the replacement variety is known)
• Direct comparison

Overlap pricing is the preferred method, if not all information is available, bridged overlap is used (or direct comparison if the new product the similar enough to the old product to use this method).

For some specific product groups (e.g. cars), explicit quality adjustment (QA) is performed.

Figures for 2022:

18.5.5. Seasonal items

Seasonal products are treated according to the All-Seasonal Estimation approach. 

ASE is defined as follows: 

‘All-seasonal estimation’ means the estimation of a price for a product-offer of a product that is out-of-season so that:

- in the first month of the out-of-season period, the estimated price is equal to a typical price observed in the previous in-season period, and,

- from the second month, the estimated price is equal to the estimated price for the preceding month, adjusted by the change in observed prices on average over all available products in the same subdivision of ECOICOP/HICP

The following sub-classes are treated as seasonal: 01.1.6.1; 01.1.7.1; 03.1.2.1; 03.1.2.2; 03.1.2.3; 03.2.1.1; 03.2.1.2; 03.2.1.3.

Since 2022, sub-class 09.6.0.2 is also treated as seasonal.

Not applicable.

None.