The selection of items is based mainly on their importance, representativeness, availability and the extent of their use. The weight of an item does not always refer only to the relative contribution to consumption of that item, but can represent the combined consumption expenditure value of several items similar in nature and price behaviour for which prices are not collected.
| Major groups | Number of items | Weights | Approximate number of price quotations |
|---|---|---|---|
| Food | 123 | 15.5 | 27000 |
| Beverages and tobacco | 7 | 7.2 | 850 |
| Clothing and footwear | 46 | 6.0 | 2300 |
| Housing, fuel and light | 11 | 19.8 | 82 |
| Household furnishings, supplies and services | 64 | 6.1 | 5200 |
| Health and medical care | 12 | 3.3 | 460 |
| Transport and communications | 36 | 18.2 | 1650 |
| Free time, recreation and education | 52 | 10.1 | 2000 |
| Other goods and services | 50 | 13.8 | 4000 |
| Total | 401 | 100.0 | (a) 43542 |
Note: (a) The number of price quotations does not include price quotations used in measuring housing items i.e. rents and prices of old flats.
As a general rule, consumption expenditure is recorded using the acquisition principle, so that purchases on hire-purchase schemes and on credit plans (including durable goods credit purchases) are included in consumption before their payment (i.e. at the time of their purchase).
Included are receipts of goods and services and the value of gifts of goods received.
Excluded are gifts and assistance given to other households, such as gifts of money and goods, newspapers and periodicals, consumer durables, travel, maintenance allowance payments and damages paid directly to households.
Included are goods and services received as income in kind (on the basis of an employment contract or a life annuity or as assistance) and the value of gifts or goods received (e.g. dwelling, motorcar, meals).
Expenditures reimbursable under the Sickness Insurance Act, such as those for travel, medicines and health care services, and lottery stakes are recorded in net amounts, i.e. prizes won and reimbursements received were deducted.
For certain consumer commodities, income received from the sale of used goods was deducted from the purchase value of new goods. This applies to household appliances and transport equipment.
Certain items comparable to current transfers are counted as consumption expenditure because of the voluntary nature of the payments. These include compulsory fees and fines paid to government authorities, membership fees paid to non-profit institutions (churches, political parties, trade unions), indemnity insurance premia and interest payments on consumer credit (i.e. life and accident insurance premia, travel and travel goods insurance premia, third-party insurance premia, registration and licence fees, passports and visas, fines and other comparable compulsory fees, membership fees to labour market organisations, church tax, offertory payments, charitable contributions and the like, interest payments on study loans and interest payments on other consumer credits). Purchases of used goods are included in consumption expenditure in the same way as other purchased goods.
Excluded are income tax and other direct taxes and contributions to pension funds and social insurance schemes.
Motor insurance premia (for both compulsory motor third-party liability and motor vehicle insurance) are recorded in gross amounts.
Currency exchanges and the imputed housing benefit provided by owner-occupied dwellings are not included in consumption expenditure in the CPI.
Insurance associated with specific consumer goods is included. Among housing expenditure for owner-occupied dwellings, depreciation charges for wear and tear, maintenance costs and other fixed expenses are counted as consumption expenditure.
Approximately 9 000 prices are collected from major cities. 14 price collectors collect prices from the most popular department stores, supermarkets and special shops in their areas.
In Finland, the market share of the so-called discount stores amounted to about 11% in 1991. In the consumer price index discount stores have been defined as stores that publish a price list covering their entire assortment.
A new method of collection are mail-order prices. The prices of mail-order products are picked from the catalogues of the largest mail-order company on a quarterly basis. From the catalogues one monitors the prices of clothing, household textiles, small household appliances and cosmetics.
The sample of outlets were selected with the use of PPS-sampling (Probability Proportionate to Size). The probability that an establishment is included in the sample is dependent on the turnover of the outlet. The actual sampling is made using the cumulative sum methode.
Prices for the CPI are collected from nearly 2000 outlets. Only grocery stores and service stations have been sampled. In this way, about 250 grocery stores and about 250 service stations were selected. The major part of the collection outlets belong to the regionally centralised collection. In the new index there are 14 regional centres. The share of the regionally centralised collection of the entire prise material is 21%. In the monitoring of more problematic products, one has continued to concentrate more on attaining as reliable a price development as possible than on the sampling theory representativeness of collection outlets. The representativeness of outlets is based on the impression of price collectors of the most popular purchasing establishment in their own region. The collectors must choose the collection outlets for each commodity in such way that a representative amount of department stores, auto markets and special stores are included.
Price data collection for CPI items takes place mainly through
visits by interviewers to outlets. In addition, for a small number
of food and other perishable items, price data are collected from
the price lists of the outlets concerned. Also prices of one of
the discount store
- chains are collected from such price
lists, while the other chains' prices are collected at the outlets.
Representative items were chosen on the basis of the household survey. The price collectors are given the opportunity to choose the actual brand within given limits. The package size and, for example certain technical properties, are given as a guide to price collectors.
Price data are collected each month for food and other perishable items, household utensils, cleaning and washing preparations and other household supplies; every two months for consumer durables and certain categories of clothing; seasonally for certain other categories of clothing, fruit, vegetables and berries; each quarter or as needed for services and other items.
The data are collected between the 11th and the 17th of each month. The interviewers are instructed to collect the data randomly within the specified time period, so as to avoid collecting data always on the same weekday. The price data for (i) electricity, gas and water are collected from municipal electricity boards and water works; for (ii) medical care, from government health care authorities; for (iii) education and training from universities and the press, respectively; and for (iv) transport and communication centrally by Statistics Finland by telephone, from price lists, lists of official tariffs or brochures, or by visiting the enterprises concerned.
The main principle is that account is taken of retail prices and of any normal discounts on retail prices that are available to all persons. Normal sale prices are taken into account but cash discounts and hire purchase or credit terms are not.
Prices are only collected for new products (second-hand purchases are netted out in the weights).
The price movement of housing services provided by owner-occupied dwellings is measured by the price movement of various cost items, such as maintenance expenses and interest and depreciation charges.
For owner-occupied houses, maintenance costs cover repair, chimney-sweep services and waste management costs, ground rents, insurance premia, water charges and street tax. Interest expenditure on housing loans, whether conventional loans or low-interest government loans, are measured by the movement of the nominal interest rate. The price movement of the depreciation item is measured by the Statistics Finland price index for old owner-occupied flats.
For owner-occupied flats, maintenance costs are measured by the price movement of maintenance charges and repair costs. Interest expenditure and depreciation deductions are measured in the same way as for owner-occupied houses. The weights of the different cost items for owner-occupied housing are derived from the Statistics Finland household survey for 1990.
Detailed specifications (quality specifications) were prepared for all collection items.
The specifications (product specifications) lay down the requirements which the items must meet. In many cases, the interviewer is free to select the final collection item as long as the selection takes place according to the set guide-lines. The specifications include the following: detailed quality specifications, size or size range, composition, material, etc.; and, for some items, a list of brand names accepted for price collection and instructions concerning the type of packaging used.
In some specifications, mainly for services, cars and car parts, the item is restricted to a strictly specified brand, product or service.
Daily consumed goods are subject to few quality change adjustments because their prices relate to unit prices, &ie prices per gramme or litre, and not to the price for per item. Any quality change adjustments to these commodities are made at Statistics Finland.
Regarding clothing items, household appliances, home electronics and other items on which price data are collected for the regional centres, a change in quality is at first evaluated by the interviewer after consulting the seller about quality differences between the old and the new commodities. The final decision is made at Statistics Finland, ensuring uniform treatment of quality changes throughout the country.
Earlier, fruit and vegetables were also clearly seasonal products.
Prices were collected only when products were on sale and their
price was on the correct
level. Today fruit and vegetables
are available throughout the year. Only strwberry's price is
collected uniquely in the month of July.
Items with seasonal variations, either in their prices or availability, have the same weights throughout the year, as is the case for all items of the CPI.
The price relative of an item for a major area is computed as the average (arithmetic mean) of the price relatives of products priced for the item in the major area. At the national level, the price relatives for the major areas are weighted according to the relative contribution of each major area to final consumption expenditure.
The index is computed by weighting the indices for the major areas according to the relative contribution of each major area to final consumption expenditure. Within each major area, the index is calculated by weighting the price relatives of items according to their relative contributions to the area's final consumption expenditure.
If price data are missing, the data for the previous reference period remain in effect. If no data have ever been recorded for a product, it is excluded from the index and has no influence on it. In case of faulty data, an attempt is made to obtain correct data through interviews. If this is not possible, the presumably correct data for the previous reference period remain in effect.
A net price index and a tax rate index, as well as an indicator of underlying inflation are also calculated. An indicator of underlying information is a net price index, that excludes dwelling prices and interests on housing loans.
All item levels are publicaly available at request.
CPI is published the 15th or the closest working day of the following month.
Average prices are published quarterly mainly for groceries.
Bulletin of Statistics(Helsinki).
Idem: Consumer Price Index 1990 = 100
, Methodology and
Practice, Studies No. 200, 1988.