State Statistical Office of the Republic of North Macedonia

Sector for Labour Market and Department for Living Standard / Department for Living Standard

"Dame Gruev" 4, 1000 Skopje, Republic of North Macedonia

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

No deviations from the target population.

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

North Macedonia has no overseas territories. The economic territory consists of the geographic territory. The HICP covers the entire economic territory consistent with NA. The NA estimates follow the definitions laid down in ESA2010.

3.8.1. Start of time series

The HICP series started in January 1997.

3.8.2. Start of time series - national specifics

January 2005 (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.

Legal basis

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;

Law on State Statistics

 The confidentiality of the HICP data set is treated in line with national legislation:

• Law on State Statistics ('Official Gazette of the Republic of Macedonia' No. 54/97 21/07, 51/11, 104/13, 42/14, 192/15, 27/16, 83/18 and 220/18) and ('Official Gazette of the Republic of North Macedonia' No. 31/20) Articles 34-43.

According to the Law on State Statistics (see webpage: https://www.stat.gov.mk/ZakonZaStatistika_en.aspx) (Article 41) and the Policy on Access to Anonymised Microdata for Scientific Purposes, (see web page: https://www.stat.gov.mk/ZaNas_en.aspx?id=22), data collected for the purpose of official statistics may be used for scientific purposes if there is no risk of direct or indirect identification, i.e. disclosure of data individuality. Access to microdata is possible only in the safe room at the SSO, based on a submitted and approved request and a signed agreement. 

According to the national legislation, individual data are not published.

According to the Law on State Statistics https://www.stat.gov.mk/ZakonZaStatistika_en.aspx. (Article 41) and the Policy on Access to Anonymised Microdata for Scientific Purposes, https://www.stat.gov.mk/ZaNas_en.aspx?id=22, data collected for the purpose of official statistics may be used for scientific purposes if there is no risk of direct or indirect identification, i.e. disclosure of data individuality. Access to microdata is possible only in the safe room at the SSO, based on a submitted and approved request and a signed agreement.

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 is available in both Macedonian and English, on the SSO website.

In accordance with the dissemination policy, all users have equal access to statistical data at the same time. Data are released on the web site at the same time for all users, which are informed with the Release Calendar, and no user has privileged access.

Monthly

Macedonian HICP is disseminated on a monthly basis. 

The HICP index levels are disseminated with two decimals.

All publications are available in both Macedonian and English.

Not applicable.

HICP table data and press release are available on SSO’s website, theme: Retail prices and consumer prices

MakStat database: PxWeb - Select table (stat.gov.mk), under theme Prices/Retail Prices and Consumer Prices

There is no access to microdata.

Not applicable.

The HICP Methodological Manual provides the reference methodology for the production of HICP.

10.6.1. Documentation on methodology - national specifics

The HICP metadata are available on SSO’s website. Written instructions like manuals and process documentation as well as the Price Collectors Manual are available only in Macedonian.

Not applicable.

The quality activities in the Macedonian National Statistical System are built on the principles of the European Statistics Code of Practice, covering the institutional environment, statistical processes and statistical outputs. The NSS Quality Assurance Framework includes methods and tools that aim to guarantee the compliance with the requirements to the statistical processes and products, and to ensure the required statistical information quality.

The SSO regularly checks and follows new recommendations and regulations. The accuracy of data sources is monitored by assessing the methodology of weight and price sources and following the methodological recommendations. There is a variety of data sources both for weights (National Accounts data, Household Budget Survey data) and for prices (local price collection and central price collection, telephone, e-mail, Internet, etc.). The type of survey and 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 at the represented geographical location. All private households in the economic territory are covered.

11.1.1. Quality management - Compliance Monitoring

Compliance Monitoring

11.1.2. Quality assurance - national specifics

The quality activities in the Macedonian National Statistical System are built on the principles of the European Statistics Code of Practice, covering the institutional environment, statistical processes and statistical outputs. The NSS Quality Assurance Framework includes methods and tools that aim to guarantee the compliance with the requirements to the statistical processes and products, and to ensure the required statistical information quality. One of the most important tasks of the Department of Living Standard related to HICP, CPI and RPI production is to control all processes for the quality of the index results. The following processes are covered by that task:

• Basket composition specification (i.e. items, weights, revision of weights, replacements of items, inclusion of new items, deletion of others);
• Sampling of outlets and items;
• Price collection (including substitution of outlets and items);
• Data processing (e.g. data entry, data editing);
• Adjustments for quality changes;
• Index computation (i.e. mathematical formulae);
• Personnel training;
• Monitoring of the implementation of HICP production.

Evaluation of the completeness and accuracy of the information and assurance of the compliance of the HICP sub-indices with comparability and quality requirements

• Quality assurance of introduction of new or modified methods and procedures
• Quality assurance of the work of the price collectors
• Quality assurance of the work of the staff in the central office of the SSO responsible for data validation at national level
• The procedures for the consistency of the output results rely on data validation and on the review of indices before dissemination
• The documentation of the CPI/HICP processes exists in the form of guidelines, instructions for particular tasks and software manuals both at national and at regional level

11.2.1. Compliance monitoring - last report and main results

Not available.

11.2.2. Quality assessment - national specifics

HICP indices are produced in compliance with HICP methodological requirements and standards. The accuracy, timeliness and punctuality, accessibility and clarity, comparability and coherence are controlled on regular basis.

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 main users of data are: National Bank, Ministry of Finance and other state agencies, private agencies for analysis, domestic and foreign enterprises, students, media, etc. Also, some international organisations and institutions such as: WB, IMF, UN ECE, etc. use HICP price index data.

In order to obtain users’ opinions on products and services, the State Statistical Office conducts a survey to measure customer satisfaction. The last survey, for the fourth time, was conducted in 2019. The questionnaire was designed to obtain information about the habits of users in the use of statistical data, their views on the statistical data, the principles of the European Statistics Code of Practice relating to statistical outputs, the services of employees with regard to the provision of data and information, the web site, as well as to obtain basic demographic data on participants in the survey.

No missing data. The SSO produces and delivers the full set of HICP indices and weights.

The accuracy of source data is monitored by assessing the methodological soundness of price and weight sources and adherence to the methodological recommendations. Statistical data are with good accuracy. The accuracy of HICP is assured by strictly following Eurostat's methodological recommendations and regulations. The type of survey and the price collection methods ensure sufficient coverage and timeliness.

The SSO does not produce estimates of sampling errors. The use of non-probability sampling (purposive sampling) makes it difficult to assess the sample error.

For the HICP, non-sampling errors are not quantified. The SSO makes efforts to reduce non-sampling errors through continuous methodological improvements and survey process improvements.

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).

The HICP data are fully 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, backward calculations under the newer standards were performed when appropriate basic data were available. The main referencing has been from 2005=100 to 2015=100 (since January 2016).

Differences between the HICP and national CPI

Different population coverage:

The HICP covers the consumption expenditure of non-residents and institutional households within the economic territory of the country, while they are not included in the national CPI.

Different data sources for the calculation of weights:

The main data source for the HICP weights is the National Accounts data, while the main data source for the CPI weights is the Household Budget Survey.

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 published HICP/CPI data may be revised for mistakes, new or improved information, and changes in the system of harmonised rules.

In general, monthly Macedonian HICP/CPI indices are not subject to revisions.

Some errors were made in transmitted files in some months, but the data were revised and transmitted as revised version to Eurostat.

The main reason for the revision was some errors in data calculations.

18.1.1. Weights

The expenditure shares based on National Accounts data that referring to t-1 are the main source of data for construction of the HICP weights up to 4th ECOICOP levels of aggregation. Data from the Household Budget Survey (HBS) t-2 are used for construction of the weights at 5th ECOICOP level of aggregation or where the information from NA is not available. Weights applied to different aggregation levels are reviewed and updated annually, based on the NA and HBS results and other data sources.

18.1.1.1. Compilation at elementary aggregate level

One additional level is defined below sub-index level: 6-digit level (EAs).

The lowest level of aggregation where explicit weights are introduced is 6-digit level (EAs).

Data from the Household Budget Survey (HBS) and from additional sources are used for construction of the weights at 6-digit level of aggregation. There are no cases where the weights are adjusted.

The main sources used in HICP weights construction are NA (t-1) and HBS (t-2). The multiple sources are combined as follows:

1. The HFMCE, according to the domestic concept, preliminary data for year t-1 is received from the NA department.
2. The NA data for year t-1 are restructured to the HICP structure for year t according to the ECOICOP/HICP classification. This is done at all levels of aggregation where the information from NA is available. When NA data are not available, the HBS data for year t-2 or last updated data from additional sources are used.
3. The NA t-1 data are further combined with the HBS data for year t-2 or last updated data from additional sources are used to derive the weights at lower levels of aggregation where the NA data are not available.
4. At the end, the weights are price updated to December t-1 prices.

The EAs' weights are reviewed and updated annually.

18.1.1.2. Compilation of sub-index weights

The weights at sub-index level are derived from NA based on t-1.

The NA provides preliminary data for year t-1 only for the first three quarters of the year t-1, while the 4^th quarter of the year t-1 is estimated.

The way of estimation of the 4^th quarter of the year t-1:

- 4^th quarter of the year t-1 = 4^th quarter of the year t-2 * (NA Q1-Q3 of the year t-1 / NA Q1-Q3 of the year t-2)

Total NA data for year t-1 is sum of preliminary Q1-Q3 and estimated Q4

Weights are adjusted in cases where there is available more up-to-date information at detailed level. Comparisons are made with the previous NA data or HBS data to detect possible anomalies. Results are discussed with NA in order to improve the quality of weights.

18.1.1.3. Compilation of sub-index weights

The reference period of the data used for the calculation of the weights of sub-indices (ECOICOP sub-classes and higher) s t-1.

18.1.1.4. Weights – plausibility checking

The review and update of weights at lower levels is done during the annual updating of the HICP weights. The constructed weights are analysed and validated at all hierarchical levels of aggregation (from lowest EA level to general index). Plausibility checking activities include:

• Analysis of consistency with other available sources of information - administrative sources, other statistical surveys, market researches, etc.;
• Checking of the internal consistency of the weights.
• Analysis of outlined trends (absolute and relative) in comparison with the previous year weights to detect possible anomalies;

18.1.1.5. Price updating

The price-updating to the previous year’s average price level is carried out. In constructing HICP weights, the NA t-1 data are combined with HBS data for year t-2. The price update is done at EA level, where the index for price update is available. The higher levels are calculated as a sum from price updated lower levels.

The weights are price updated to December t-1 prices at EA level.

18.1.1.6. Compilation of total household final monetary consumption expenditure

The weights at sub-index level are derived from NA based on t-1.

The NA provides preliminary data for year t-1 only for the first three quarters of the year t-1, while the 4^th quarter of the year t-1 is estimated.

The way of estimation of the 4^th quarter of the year t-1:

- 4^th quarter of the year t-1 = 4^th quarter of the year t-2 * (NA Q1-Q3 of the year t-1 / NA Q1-Q3 of the year t-2)

Total NA data for year t-1 is sum of preliminary Q1-Q3 and estimated Q4

18.1.2. Prices

The Macedonian prices for CPI/HICP indices are based on survey data

18.1.2.1. Data Source - overview  

See the Annex in point 19.1.

18.1.2.2. Scanner data - general information

Not relevant.

18.1.2.3. Web scraping - general information

The main types of retailer for which the prices have been web-scraped during the current year was on-line web pages of the respective retailers. The web scraped data is used for the following ECOICOP classes and groups:

• 07.1.1 Motor cars – the weight covered by web-scraped data is 51%
• 07.1.1.2 Second-hand motor cars – the weight covered by web-scraped data is 100%

The prices of collected second-hand motor cars using the web-scraping are used as a proxy for physical shop price collection (i.e. as a price estimate for prices paid in physical outlets).

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

The HICP covers the entire area of the country. All regions are covered in the sample of localities where the prices for HICP are collected. The sample of localities is representative for the entire territory, the stratification of the index being regional. 8 regions out of 8 (NUTS 3) are included in the sample.

18.1.3.2. Sampling design: outlets

The SSO applies purposive sampling of outlets. Outlets are selected at regional level, and general guidelines are given to local persons responsible for price collection in order to adjust the structure of the outlets to the evolution of retail trade structure (e.g. increasing ratio of supermarkets). The outlets are chosen to be representative as far as possible. The outlet sample is updated annually at regional level and regional offices have complete lists of outlets. The SSO monitors their activity.

The following main categories of outlets are covered, including supermarkets, hypermarkets, general and specialised stores and market stalls (open-air markets):

• Hypermarket / large supermarket
• Small supermarket
• Outdoor (open-air) 'green' market (stall, stand)
• Indoor market, bazaar, mall (stall, stand)
• Services' outlet
• Catering services’ outlet (restaurant, brasserie)
• Specialised chain of stores
• Specialised small shop
• Small retail store
• Other

18.1.3.3. Sampling design: newly significant goods and services

The SSO systematically seeks to identify newly significant goods and services. Both completely new products and products that have been available for some time on the market but consumed in relatively small amounts are covered in this exercise. Newly significant goods and services are introduced at the end of each year (in December) during the annual revisions of the consumer basket. The newly significant goods and services have been introduced into CPI/HICP by adjusting the category weight or by re-assigning a weight to the new product. The procedures for identification of newly significant goods and services are based on:

• Analyses of HBS data on the structure of household expenditures;
• Price collectors’ information;
• Research and consultations with suppliers;
• Market research’ information;

The significance levels for new products and services are measured based on information from HBS data and on market research information, if available.

In 2023, the following new products were included in CPI/HICP: electronic cigarettes (Division 02), electronic scooters, one airplane destination from Skopje to Belgrade, the complete list of new cars implementing some hybrid models of vehicles (Division 07) and smart watches (Division 09).

Price data is collected every month.

18.3.1. Price collection surveys

Regional price collection

In North Macedonia, most of the prices are also observed by regional price collectors. Approximately 20 price collectors located in 8 district centres do the regional price collection. The main methods used for regional price collection are: personal visit.

Training of price collectors:

Meetings with price collectors are organised once a year. The main purposes of the meetings are to get an overview and to acquaint price collectors with the legal acts, basic concepts, definitions and requirements for the CPI/HICP and to instruct price collectors on the requirements for their fieldwork, data entry and validation. The meetings cover all aspects of the data collection process as well as how the collected data contribute to the final product (CPI/HICP). Special attention is paid to the quality of the collected data.

The price collectors learn a lot from the staff in the subject matter department from the central State Statistical Office on a regular basis during monthly CPI/HICP data processing and validation at national level. The price experts inform price collectors about the mistakes made and consult them on different issues. They also assist the price collectors in the right decision-making and instruct them in the collection of the information on prices. The experts and price collectors communicate by telephone and email.

Central price collection

Part of price collection is done centrally by the staff in the central office of the SSO. The prices of the following products are collected centrally:

• Cigarettes;
• Fuels;
• Electricity;
• Medicines;
• Hospital services;
• New and second-hand cars;
• Railway transport services;
• Air transport services;
• Letter handling services and other post services;
• Mobile phones;
• Fixed and mobile services and bundled telecommunication services;
• Desktop computers and tablets;
• Pre-recorded recording media;
• Books;
• Packaged holidays;
• Banking services;
• Administrative fees;
• Insurance fees.

The main methods used for central price collection are: visiting the web sites of the respective suppliers and web scraping.

18.3.2. Timing of price collection

Data on prices are collected between the 1st and the 25th day of each month. The majority of prices are collected once a month, with the exception of agricultural products (twice a month). For the purpose of organising the observation time in individual months, products are classified into the following related groups:

• Agricultural products (observed in the 1st and 3rd week)
• Food products (between 11th and 17th of the month)
• Non-food products (between 1st and 15th of the month)
• Services (between 14th and 22nd of the month)
• Fuels (between 26th in previous month and 25th of the current month).

Process for validating the basic data

The monthly checks against errors and mistakes in price information are done during the validation stage of CPI/HICP production. Data quality checks and validation work is distributed between the central State Statistical Office and regional statistical offices, but most of the work is carried out at the subject matter department (Living Standard Department) in the central SSO.

The first validation of the data in the central SSO is done after data entry of monthly prices. The consultation with price collectors about some outlier price data, or bigger differences with the previous month prices are essential for data quality. The second validation of the data in the central SSO is done after the first index calculation. Data quality checks also include extreme and unusual price levels/changes; missing prices validation; product specification change validation; etc.

Procedures for testing the correctness and plausibility of outcomes

The monthly checks against errors and mistakes in preliminary index results are done during the validation stage of CPI/HICP production. Data quality checks and validation is carried out at the subject matter department (Living Standard Department) in the central SSO.

The first validation of the data in the central SSO is done after data entry of monthly prices. The consultation with price collectors about some outlier price data, or bigger differences with the previous month prices are essential for data quality. The second validation of the data in the central SSO is done after the first index calculation. At the end, the indices are reviewed before dissemination. The senior staff of the subject matter department reviews the indices before publication. The validation of the indices goes down to quite detailed item groups. Usually the meeting with experts responsible for validation takes place and the various topics concerning the monthly production round are discussed (reported price changes, imputation, cases of quality and seasonal adjustment, treatment of missing prices, etc.).

18.4.1. Data validation - price data

Procedures to detect data entry errors

The monthly checks against errors and mistakes in price information are done during the validation stage of CPI/HICP production. Data quality checks and validation work is distributed between the central State Statistical Office and regional statistical offices, but most of the work is carried out at the subject matter department (Living Standard Department) in the central SSO.

The first validation of the data in the central SSO is done after data entry of monthly prices. The consultation with price collectors about some outlier price data, or bigger differences with the previous month prices are essential for data quality. The second validation of the data in the central SSO is done after the first index calculation. Data quality checks also include extreme and unusual price levels/changes; missing prices validation; product specification change validation; etc.

Treatment of the detected errors

The detected errors are treated as follows: each case (problematic price) is considered individually, trying to obtain additional information usually from the price collectors for removal of the error and all necessary modifications are done only on the basis of relevant information. The rejections or adjustments of the reported prices are done centrally during the validation process in SSO. The rejection/adjustment of one price observation is done on account of information related to the individual observation concerned. During the validation process in central SSO, the responsible experts contact price collectors in order to derive additional information for the individual observation concerned. In addition, if it is considered, the prices are cross-checked in outlets or on the Internet.

Monitoring of the consistency of the price information over time

The monitoring of the consistency of the price information over time is done during data validation using the various reports/lists generated by the software.

Monitoring the consistency of the price information across similar products in the same period

The monitoring of the consistency of the price information over time is done during data validation using the various reports/lists generated by the software. 

Comparison is done between prices of the one and same product in the same period.

Editing practices and possible adjustment of price observations

There is no automatic rejection of observed prices in our validation process. Each case (problematic price) is considered individually and all necessary modifications are done only on the basis of relevant information. The rejections or adjustments of the reported prices are done centrally during the validation process in the SSO. The rejection/adjustment of one price observation is done on account of information related to the individual observation concerned. During the validation process in the central SSO, the responsible experts contact price collectors in order to derive additional information for the individual observation concerned. In addition, if it is considered, the prices are cross-checked in outlets or on the Internet.

18.5.1. Elementary price index formulae

Macedonian HICP is a Laspeyres-type index.

For compilation of price indices for elementary aggregates, the ratio of geometric mean prices is used.

The following number of decimals are applied:

• The number of decimals that are applied for price observation is 2 decimal places with the exception of some tariff prices (electricity, heat energy, etc.) that are collected with more than 2 decimal places.
• The number of decimals that are applied for weights is 4 decimal places.
• Index figures are compiled and transmitted as unrounded information.
• Index figures are published with 2 decimal places.

18.5.2. Aggregation of different data sources

Aggregation steps from bottom up:

• Calculation of the elementary aggregates’ indices using ratio of geometric mean prices.
• Calculation of the higher-level indices as weighted average of the low-level indices with corresponding weights.

18.5.3. Chaining, linking and splicing methods

Macedonian HICP is chained Laspeyres-type index. The weights are updated annually. HICP in year t is calculated with weights t-1, with base prices from year t-1 and index reference period t-1=100. Each year, the link is done in December, using an index for December of year t-1 calculated with weights W_t-1, and with index and price reference year t-1. Finally, HICP is rebased to 2015=100.

18.5.4. Quality adjustment – Detailed information

Quality adjustment procedures have been applied in cases when characteristics of replacement product differ from those of the replaced one. Therefore, it is necessary to estimate the effect of the change in quality between the old product and the replacement product. In order to deal with quality changes, a case-by-case approach is adopted. The choice of method depends on the specific replacement situation and selected replacement product-offer.

Quality adjustment procedures are performed in the SSO by the central staff. At the regional level, price collectors make no quality adjustments.

During the year, price adjustments due to quality changes are most frequently made for cars, PCs, major household appliances, clothing, and technical products.

The following methods are used:

Explicit methods

Direct price comparison: e.g. clothing 

Option pricing (when the prices of the product-offer options are available): new cars

Judgmental QA (when additional information is available and assessed by judgement or by specialist): e.g. clothing

Package size adjustment (value of a change in package size is assessed as the relative change in package size): e.g. food and cigarettes 

Implicit methods

Bridge overlap (average price developments of other available product-offers it the same elementary aggregate are used as a bridge for estimation for the price change): e.g. PCs, technical products, household appliances

There are no automatic QA procedures for any product group. Instead, the choice of method depends on the specific replacement situation and selected replacement product-offer.

When the bridged overlap is considered inappropriate, another quality adjustment method is used. Which quality adjustment method will be used depends on circumstances. The direct comparison or some other explicit quality adjustment procedures are used.

18.5.5. Seasonal items

Minimum standards related to the seasonal regulation are applied to fruits, vegetables, clothing, footwear, package holidays and tyres.

The fixed-weight approach is used for determining the weights for seasonal items, i.e. during the whole year indices of seasonal products are calculated with fixed weights.

Estimated prices for seasonal products that is out-of-season are calculated by ASE (all-seasonal estimation) or by CSE (counter-seasonal estimation):

•           For seasonal fruit and vegetables – ASE is used;

•           For seasonal clothing and footwear products – CSE is used and where it is not feasible ASE is applied;

•           For tyres – CSE is used;

•           For package holidays – ASE is used

For most of the seasonal items that are out-of-season, the All-season estimation method (ASE) is applied. ASE method is a method where 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 ECOICOP class, group or on more detailed level. For few seasonal items that are out-of-season, Counter-seasonal estimation (CSE) is applied. CSE method is a method where 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 price of the previous month, adjusted by the price change of all seasonal products that are in-season.

Not applicable.

None.