Volume 1: Consumer Price Indices

Chile

Official title

Indice de precios al consumidor (Consumer Price Index).

Scope

The index is compiled monthly and covers all private households in Greater Santiago.

Official base

April 1989 = 100.

Source of weights

The weights and selected items were derived from a household expenditure survey, conducted between December 1987 and November 1988 in Greater Santiago, among a sample of around 5,500 households of all social groups. The basic criterion for the selection of goods and services to be included in the basket was that they should each account for at least 0.0325 per thousand of total household expenditure.

In addition, if a sub-group accounted for 0.0325 per thousand or more, but included no single item reaching this percentage, the goods which had the highest weights were selected.

Once the goods and services for a given sub-group were selected, the general approach was to distribute the sub-group's total weight proportionately among those items.

The weights of non-selected sub-groups were distributed proportionately among the selected goods of the corresponding group.

Weights and composition

Major groups	Number of items	Weights	Approximate number of price quotations
Food	137	32.98	...
Housing:
Rent and repair	11	9.89	...
Fuel, light, water	6	6.40	...
Furniture, furnishings and household equipment	53	9.11	...
Clothing and footwear	64	8.44	...
Transport and communication	19	16.96	...
Other:
Medical and personal care	32	5.15	...
Education and recreation	35	6.90	...
Tobacco	1	1.81	...
Other	10	2.37	...
Total	368	100.00	...

Household consumption expenditure

Consumption expenditure includes all goods and services purchased by households, excluding property (land, dwellings, etc.) and stocks, bonds, etc.

Consumption expenditure includes life insurance premiums, money orders, gifts and insurance premiums for consumer goods (dwelling, vehicles). It excludes benefits in kind, owner-occupied dwellings, social security and pension fund contributions, income tax and other direct taxes. For credit purchases, only payments actually made during the reference period are included.

Method of data collection

Prices are collected by agents from about 3,700 selected retail outlets and service establishments in the 28 areas of Greater Santiago. Food prices are collected once a week; prices for housing, clothing and others, once a month; and for medical care, once a quarter.

Supplementary surveys were carried out in order to determine the distribution of the total sample of data sources for each item among the various areas of Greater Santiago, in light of the different types of establishments selling such items. The first such survey covered over 6,000 retail establishments, and identified the most representative establishments in each area of Greater Santiago with respect to sale of the various items. It led to a classification of these establishments as regards the availability of items, sub-groups, groups and collections of items for sale.

The second survey was a point of purchase survey, covering a sample of around 1,000 private households. This survey revealed the communes and types of establishments with the most frequent sales and greater share of household expenditure in Greater Santiago.

Housing

Rent data are obtained each quarter.

Specification of varieties

Along with the definition of the basket, specifications of items to be priced were developed in as much detail as possible, including the quality, shape, size, weight, make and appearance of each item selected. This was based on data from the household expenditure survey, market studies and related methodological studies carried out recently for Greater Santiago, as well as INE experience in price monitoring.

Substitution, quality change, etc.

If an item is no longer available on the market, a similar item is substituted and a linking method is used. If a similar item does not exist, the weight is redistributed among the other items in the sub-group. If there is a quality change, a linking method is used.

Seasonal items

Not included in the index.

Computation

The index is computed according the Laspeyres formula as a weighted arithmetic average with fixed base, using weights corresponding to the base period.

The price relative for each item is calculated by dividing the average price for the current period by the average price for the base period. Average prices are the simple arithmetic averages of prices ascertained in the various points of sale.

Other information

Sub-indices are published for food, housing, clothing, transport and communication, and others.

Organisation and publication

Instituto Nacional de Estadísticas: Indice de Precios al Consumidor (Santiago).

Idem: Informativo Estadístico.

Idem: Indice de Precios al Consumidor. Base Abril 1989 = 100. Aspectos Metodologicos.