The weight of items excluded from the index are allocated to items that are included in two different ways:
In a few cases where it is not feasible to distribute the weight of an excluded item amongst other items, sub-groups or groups, the expenditure is excluded entirely from the weighting calculations. This is the same as if the weight had been distributed amongst all of the items in the whole CPI, i.e. it does not alter the relative weights of any of the items included.
Major groups | Number of items | Weights | Approximate number of price quotations |
---|---|---|---|
Food | 104 | 49.308 | 5 |
Housing | 34 | 10.458 | 5 |
Household goods | 60 | 13.316 | 5 |
Clothing and footwear | 40 | 5.623 | 5 |
Transport | 15 | 5.771 | 3 |
Tobacco, alcoholic beverages and Kava | 6 | 6.987 | 5 |
Other goods and services | 48 | 8.537 | 4 |
Total | 307 | 100.000 | 32 |
In selecting outlets for pricing, the large traders are first selected because they account for substantial proportions of sales and sell a wide range of goods. These are then supplemented by a sample of smaller outlets of various types to ensure that there is a balanced coverage for all items. For example, for an item such as tinned foods some small corner shops are selected both in and out of Nuku'alofa as well as the large supermarkets in Nuku'alofa.
Prices are not only collected from retail shops but also from a wide variety of businesses which sell consumer goods and services to the public, including fruit and vegetable markets, restaurants, hotels, motor vehicle dealers and service stations, electricity authority, taxi and bus operators, building contractors and various kinds of tradesmen, postal and telephone authority etc. Almost all of the information on retail prices is collected by means of personal visits by staff of the Statistics Department to the shops or other businesses concerned.
The CPI measures changes in actual transaction prices, i.e. the prices that consumers actually pay when they purchase goods or services. It takes into account all kinds of discounts, special offers, etc. as long as they relate to the goods and services specified and are available to all purchasers. It does not take account of discounted prices for damaged or shop-spoiled goods or special prices relating only to a sell-out of the last few items in stock.
The prices used in the CPI include retail sales tax, since this is part of the prices that consumers actually pay. Thus, any change in the rate of sales tax affects the movement in the CPI.
tea,
man's shirt,
bicycleor
taxi fareare defined sufficiently for the purpose of calculating weights but are not described in enough detail to permit consistent pricing. For
teathe specification must state whether tea-bags or packet tea are to be priced, the size of package, etc. For a man's shirt, the specification must state whether it should have long sleeves or short sleeves, the type of material and so on. For a bicycle, the specification must indicate the type and size of bike, the accessories included, etc. For taxi fares, the length of journey to be priced is specified.
Consequently, for every item in the index, detailed item specifications are written down to guide the price collectors in obtaining prices for comparable goods and services in each successive quarter. For some indix items, only one specification is priced but for others two or more specifications are priced.
However, if the old item simply disappeared without warning and a new item has then to be chosen, the process is not as simple. In that event, it is desirable in principle to obtain additional information before attempting to splice the two price series; ideally one should have a price for the new item for the last period in which the old item was available. In practice, this is often not possible and splicing has to be done on the assumption that the last price for the old item and the first price of the new item represent an appropriate price relationship between the two items.
price-relative.
The Annual Statistical Abstract(Nuku'alofa).
Idem: Consumer Price Index
.