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Using national accounts or household budget surveys as weight source in the CPI.

Insights on choosing weight sources for CPI, advantages of National Accounts vs. Household Budget Surveys, and comparisons in Norwegian CPI data.

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Using national accounts or household budget surveys as weight source in the CPI.

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  1. Using national accounts or household budget surveys as weight source in the CPI. CPI workshop Istanbul, 10 – 13 October 2011

  2. The choose of weight source • What source for weights depend on: • the purpose of the Consumer price index (CPI) • advantages and disadvantages of the source play a a • Most common weight source is National Accounts (NA) and Household budget survey (HBS) • Additional information from production and trade statistics should be considered • Weights on detailed level

  3. The Norwegian CPI • CPI and Harmonised price index (HICP) inNorway: • Yearly chained index – December as price reference • From January 2011, National Accounts (NA) is the main weight source • Before January 2011 – Household budget survey (HBS) was the main weight source • A new legal regulation for the HICP suggest NA as the main weight source • Regulation is taking place from January 2012 • Already introduced in the Norwegian HICP

  4. NA as weight source - advantages • NA covers more of private consumption • NA covers a wider reference population • More actual data if a preliminary version of NA is used • NA is founded on several statistics and sources • Better weight estimates for services

  5. HBS – advantages and disadvantages • More detailed than NR, i.e. 5-digit COICOP • Annual survey (until 2009) • May be useful to provide regional weights • 5-digit COICOP does not correspond with 5-digit COICOP in our CPI • Low respond rate in the Norwegian HBS • Underestimating of certain consumption groups in HBS, i.e. alcoholic beverages and tobacco • Sample errors - bias in the sample of respondents ?

  6. NA-version • Different versions of NA has been examined: • Final results of year t – 2 • Preliminary of year t – 1 • CPI and subgroups based on these weighting schemes have been estimated for the period August 2000 – December 2010 • Some discrepancy in the weights compared to HBS • Only minor discrepancy in the estimated overall index compared to the official CPI • Not big differences between preliminary and final version of NA

  7. Main findings • Discrepancy in the weights compared with the HBS: • Lower expenditures in NA • Repair and maintenance of dwellings • Purchase of new vehicles • Higher expenditures in NA • Services in general • Alcoholic beverages and tobacco

  8. Weights derived from NA and HBS

  9. Simulation. Overall index

  10. Simulation. Overall index

  11. Simulation. Index for alcohol and tobacco

  12. Simulation. Index for transport

  13. Simulation. Deflator and CPI (NA)

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