Volume 1: Consumer Price Indices

Chad (N'Djamena)

Official title

Indice des prix à la consommation (Consumer Price Index).

Scope

The index is compiled monthly and covers households of employees in the public and private sectors residing in N'Djamena.

Official base

February 1988 = 100.

Source of weights

The weights and selected items were derived from a household expenditure survey conducted in N'Djamena in 1972, covering non-single public and private sector employees earning between 5,000 and 20,000 francs CFA at the time of the survey. The weights were adjusted to take into account price changes between the survey period and February 1988.

Weights and composition

Major groups Number of items Weights Approximate number of price quotations
Food 675902...
Clothing 13959...
Household furnishings 18277...
Personal and medical care 16401...
Fuel and light 4437...
Construction materials 10403...
Vehicles 8491...
Tobacco 459...
Housing 2770...
Personal services 493...
Other services (incl. transport and travel) 9208...
Total 15510000...

Household consumption expenditure

The consumer price index covers only expenditure categories for which the sum paid is the result of a price (real or fictitious), applied to a quantity, and among these categories, those that correspond to household consumption.

It includes own-production and own-consumption (especially as regards agricultural products). These goods and services are estimated by assigning them fictitious or conventional prices (the market price in the nearest consumer market).

Rent and minor repairs to the dwelling (repair of adobe walls with cement) are included as consumer expenditure, but not the purchase of a dwelling, even with monthly payments, nor the addition of a room.

Also excluded are direct taxes, miscellaneous contributions and gambling. On the other hand, indirect taxes included in prices paid by consumers are included in the index.

In many households, certain family members are self-employed or own-account workers (agriculture, industry, crafts or trade). Any related supplies are obviously excluded from the household's final consumption expenditure. Also excluded from the monthly index is expenditure for which either there is no information on prices, or for which the prices noted do not conform strictly with the definition of the item considered.

Method of data collection

Prices are collected by agents twice a month from N'Djamena's two major markets. The prices of bulk products can only be determined after purchase and weighing to convert to a price per kilogramme. For certain items whose prices move very slowly (e.g. rent), prices are collected only once or twice a year. The prices collected are the asking prices in the markets surveyed, inclusive of taxes.

The asking price (quoted by the trader or artisan) differs from the average price actually paid by the consumer. The difference between these two prices is variable: it is lowest for furniture, clothing and household appliances, and highest for food. A similar difference is presumed to exist for cereals and non-food items in the index.

Housing

Not available.

Specification of varieties

Each of the 155 items is directly included in the index; in practice, for a given item in the index there may be a variety of homogeneous or heterogeneous items.

For a homogeneous variety, prices are generally similar. Thus, an average price (the average of the prices found in each of the survey outlets) makes sense. The index for the variety in N'Djamena is then equal to the average price relatives for this variety between the two periods. However, the current index uses the simple arithmetic average of the basic indices.

For a heterogeneous variety, products may differ considerably, and cannot necessarily substitute for each other. The concept of an average price therefore makes little sense. Nevertheless, it is possible for each product, e.g. three kinds of pants, to compute a basic index equal to the price relative of the product in an outlet in the base period. The index of the variety in N'Djamena is therefore equal to the simple arithmetic average of the basic indices.

Substitution, quality change, etc.

The inclusion in the index of a product whose price was not or could not be ascertained during the base period, poses no problem for homogeneous varieties since the concept of an average price for such varieties is valid. Problems arise for heterogeneous varieties, and several approaches are possible: (a) an item is no longer available and is therefore replaced by another which was on the market in the reference period; (b) the price of the new item may be estimated on the basis of proportionality, computed on the basis of a variable quantity (the rule of three method); (c) the price is linked to several of the product's characteristics. For simplicity, it is possible to focus on one of the characteristics and thereby use alternative (b). It is also possible, by using a so-called econometric formula, to shift from the product's characteristics to its value; this is the regression method.

Once incorportated into the index, the new product is considered to replace, in whole or in part, one or more products in the index. This means integrating the new product in an existing category, through the creation of a variety.

Seasonal items

Not available.

Computation

The index is computed according the Laspeyres formula as a weighted arithmetic average with fixed base, using weights corresponding to 1972.

Organisation and publication

Direction de la statistique, des études économiques et démographiques: Evolution des prix à la consommation dans la ville de N'Djamena.

Idem: Indice des prix à la consommation 1983-1989, February 1990.