Volume 1: Consumer Price Indices

Turkey

Official title

Urban Areas Consumer Price Index.

Scope

The index is compiled monthly and relates to urban households with an average monthly income of 50,000 to 1,000,000 lira in 1987 in the five main urban regions of the country, Aegean and Marmara, Mediterranean, Central Anatolia, Black Sea and East and South-East Anatolia.

Official base

1987 = 100.

Source of weights

The weights and selected items were derived from a household expenditure survey conducted during January-December 1987 among 14,424 households of all socio-economic groups in a sample of 50 settlements with more than 20,000 inhabitants, representing the five main urban regions mentioned above and 16 cities.

Items most commonly consumed by households were selected to be used for the index calculation. The items in each group were place in descending order according to their shares in total consumption and their cumulative values were estimated. Items that constituted 85 to 90 per cent of total consumption in the group were selected to represent that group in the index. This ratio was 100 per cent in some groups and around 60 to 65 per cent in others.

Weights and composition

Major groups Number of items Weights Approximate number of price quotations
Food 13234.8836451
Clothing and footwear 6212.8018727
Furniture, furnishings and household equipment 5311.2411199
Medical and personal care 293.444470
Transport and communication 236.481278
Education and entertainment 335.013748
Housing: ...26.154397
Rent 2......
Fuel and light 8......
Repairs and maintenance 5......
Total 347100.0080270

Household consumption expenditure

Actual and imputed consumption values were taken as the basis for calculating weights (income in kind used for household consumption, imputed rent for owner-occupied dwellings).

Consumption was taken as purchasing that is, as entering into the possession of a household. In general, the moment of purchase was used and delays in the delivery of goods were ignored. Except for purchases on an instalment basis, the act of purchasing wais regarded as complete when the goods entered into the possession of the household. For purchases on an instalment basis, the delivery of the goods was taken as the completion of the purchase. For income in kind the moment of entering into the possession of the household was taken as the basis.

Method of data collection

Prices are collected in 33 settlement areas by the personnel of the Price Statistics and Index Division of the State Institute of Statistics (SIS) in Ankara and by the staff of the SIS regional agencies.

Prices of the goods which do not show regional differences are collected centrally in order to prevent mistakes which could arise during separate collection, and to reduce the work load of regional agencies. For example, State hospitals, airlines, postal services, newspapers, telephone charges, encyclopedias, text-books published by Ministry of Education, university fees, medicine, electricity, monopoly goods, etc. are covered centrally.

In the collection of monthly current prices, it was decided to collect the prices twice a month for all goods except fresh fruit and vegetables in order to be able to obtain all possible price changes. These prices are collected in the weeks which include the 10th and 20th. Since the prices of fresh fruit and vegetables show greater variability, their prices are collected once a week, i.e. four times a month.

The prices used in the index are the regular prices paid by any member of the public. Credit charges and discounts are ignored but sales are taken into consideration for clothing and fabrics.

Housing

Rents are evaluated as the real rents and the imputed rents of households. Therefore, not only the rents of the tenants, but also the imputed rents of owner-occupied dwellings are reflected in the index.

The houses for which rents are recorded in each settlement are chosen by taking into consideration the socio-economic structure and housing characteristics of the districts included in the samples in the 1987 Household Expenditure Survey which were occuopied by households with an average monthly income of 50,000 to 1,000,000 lira.

Specification of varieties

The 347 items used for calculating the index were defined in each settlement area and when necessary they were redefined in detail on an establishment basis. The items are defined in such detail that even if different people are collecting the prices the same item can be priced.

Substitution, quality change, etc.

If a specified product is no longer available, it is replaced by a similar product or its weight is added to a similar item or distributed within the sub-group. New products are included in the weighting scheme at the next change of base year.

Seasonal items

For items showing seasonal variabitions in consumption, monthly variable weights are used. Fresh and dried fruit, vegetables, fish and poultry are the items showing monthly changes in consumption. Variable weights are used for these items since an item entering the index for a few months in a season leaves its place to another item the next season and it is not consumed by the same amount every month.

The weights were analysed on the basis of items. The decline in the weight of an early vegetable or fruit due to its underconsumption and the increase in its weight when its price falls and overconsumption occurs were studied and controlled with respect to each month.

Computation

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

The urban area consumer price index is calculated as the weighted average of the indices for the five urban regions, taking as weights the total consumption in each region.

Other information

The Consumer Price Index is generally updated every five years to reflect structural changes.

Separate indices are published for the five main urban regions and for 16 towns and for detailed sub-groups.

The indices are published in the Press Bulletin on the fourth day of the month following their calculation.

Organisation and publication

State Institute of Statistics: Aylik Istatistik Bulteni (Monthly Bulletin of Statistics) (Ankara).

Idem: Wholesale and Consumer Price Indexes Monthly Bulletin, (January, February, March 1990).