Methodology
Further methodological information
Procedure for the aggregation of indices
The HICP is computed as a chain-linked Laspeyres-type index. The aggregation of indices is as follows:
- The series (indices) need to be unchained by dividing the value of each month by the value of the previous December.
- The series must be aggregated by computing the weighted arithmetical average. That is, multiplying each unchained monthly value computed in step 1 with its weight and dividing the result by the sum of the weights of the products to be aggregated.
- Afterwards, the result obtained in step 2 needs to be chain-linked. This is done by multiplying the value of the aggregate of the previous December with the result obtained in step 2.
You can consult a numerical example of this procedure.
Procedure for the aggregation of country-groups
The procedure for the aggregation of country-groups is very similar to the aggregation of products described above. Only the second step, which consists of the aggregation of the unchained series, differs: the unchained monthly figures need to be multiplied by both the product weights and country weights.
The COVID-19 outbreak in Europe had led governments to impose several measures, such as restrictions in the movement of people and the closure of outlets, which had a direct or indirect impact on household consumption and thus consumer price indices.
More detailed information of the impact of these measures on HICP statistics can be found in the following guidance notes:
- Guidance note for NSIs on the replacement and imputation techniques to be used for a harmonised approach across EU Member States (April 2020)
- Consumer price index: Business continuity guidance, prepared by the intersecretariat working group on price statistics composed of Eurostat, ILO, IMF, OECD, UNECE and World Bank (May 2020)
- Guidance note on HICP issues emerging from the lifting of lockdown measures (August 2020)
- Guidance on the compilation of HICP weights in case of large changes in consumer expenditures (December 2020)
- Derivation of HICP weights for 2022 (November 2021)
- Derivation of HICP weights for 2023 (November 2022)
- Derivation of HICP weights for 2024 (November 2023)
Information on imputations made related to COVID-19
List of HICP sub-indices which have been flagged as being of ‘low reliability’ due to the COVID-19 crisis for:
- the euro area (EA) and European Union (EU) (April 2020 - March 2022) and
- individual countries (March 2020 - March 2022)
Estimates of the share of consumption expenditure that is imputed in the HICP due to the COVID-19 crisis for the periods April to July 2020 and November 2020 to August 2021 for:
- individual countries
- a selection of special aggregates for the euro area and the EU
From September 2021, the publication of this information was interrupted given that imputations reached low levels.
Recommendations establish good practices for the compilation of the harmonised indices of consumer prices.
They go beyond regulatory requirements and, therefore, are not legally binding.
They have, however, a prominent status given that they are officially endorsed by the directors of macro-economic statistics in the European Statistical System (ESS).
- Recommendation on bridged overlap (June 2021)
- Recommendation on administered prices (June 2018)
- Recommendation on the treatment of cross-border internet purchases (December 2016)
- Recommendation on the treatment of rents (June 2015)
- Recommendation on the treatment of telecommunications (June 2015)
- Recommendation on the treatment of issues relating to health care reform (December 2005)
The HICP metadata gather, under a standard structure, references and summary information regarding data quality and the production process in general.
With a view to making European statistics more accessible and clearer, the national statistical offices which are producing HICP data are also documenting their national practices.
For further details, please consult our metadata file on harmonised index of consumer prices (HICP). To find information for individual countries, please consult the national metadata available at the top of this file.
For information on the treatment of energy price compensation measures in the HICP, please refer to the methodological note on energy prices compensation measures in the HICP from December 2022.