Consumer price index

Producer: Statistics Finland
Homepage: http:// www.stat.fi/til/khi/index_en.html
Main topic: Prices and Costs
Related topics: National AccountsIncome and Consumption
Official Statistics of Finland (OSF): Yes
European Statistical System (ESS): No

Description

The Consumer Price Index describes the price development of goods and services purchased in Finland by households resident in Finland. The Consumer Price Index is calculated with a method in which the prices of different commodities are weighed together with their shares of consumption. The calculation of the index follows Laspeyres’ price index formula whereby the shares of consumption used as the weights relate to the base period. The Consumer Price Index is used as a general measure of inflation. Consumer price indices that are reviewed at intervals of a fixed number of years are suitable for short-term examinations.

The Cost-of-living Index 1952:10=100 is a long time series calculated from the latest Consumer Price Index (currently consumer price index 2005=100) and its development, therefore, follows the Consumer Price Index. Many rents, such as those on dwellings, business premises or land, are usually tied to the Cost-of-living Index. From the user’s point of view, the Cost-of-living Index is the most practical, because index revisions do not interrupt the series and the point figures of the Cost-of-living Index are published monthly at the same time as the Consumer Price Index.

In addition to their national consumer price indices, the Member States of the European Union also produce the Harmonised Index of Consumer Prices (HICP), from which Eurostat, the Statistical Office of the European Communities, calculates the European Index of Consumer Prices and the Monetary Union Index of Consumer Prices. Calculation of the Harmonised Index of Consumer Prices is guided by EU Regulations. The main purpose for which the Harmonised Index of Consumer Prices is used is inflation comparison between the EU countries. The European Central Bank uses the Harmonised Index of Consumer Prices as the measure of inflation in its monetary policy. The Finnish Harmonised Index of Consumer Prices is mainly based on the same price data and national accounts data as the Finnish national Consumer Price Index. The development of the Harmonised Index of Consumer Prices, however, deviates from that of the national Consumer Price Index, because it includes fewer commodities. In the Harmonised Index of Consumer Prices consumption does not include owner-occupancy, lottery, betting and gambling, interest rates or fiscal charges. Its coverage of the national Consumer Price Index is therefore slightly less than 90 per cent.

In addition, Harmonised Index of Consumer Prices at Constant Taxes (HICP-CT) is produced. The inflation measured by consumer price index consists mainly of products and services priced by enterprises and the public sector, and value added and commodity taxes. Some 25 per cent of the private consumption at a value of around EUR 61 billion described by the HICP consists of value added or other taxes. The index at constant taxes is based on the HICP so the two indices have the same weight structure and price data. The index at constant taxes is calculated with a method which holds the tax rate constant relative to the reference period. If there have been no changes in taxes, the indices show the same development. When tax changes take place, the impact of the tax change on commodity prices is eliminated from the index at constant taxes. The price impact of the tax changes is obtained by comparing the development of the HICP and HICP-CT.

Data content

The Consumer Price Index describes changes in consumer prices according to the consumption structure of an average household. It comprises the price development of the overall index, commodity groups and 497 commodities. Data on an individual data outlet are confidential and are not released in identifiable form to parties outside Statistics Finland. Detailed data on the commodities on which data are collected are also confidential.

The Cost-of-living Index describes changes in consumer prices according to the consumption structure of an average household. It comprises the price development of the overall index and six sub-categories.

The Harmonised Index of Consumer Prices describes changes in consumer prices according to the consumption concept and calculation methods harmonised within the EU. It is based on the price data collected for the Consumer Price Index but is less exhaustive in coverage; e.g. interest rates and most of the costs of owner-occupied dwellings are excluded from the harmonised index. The index comprises and overall index and approximately 100 sub-indices by commodity group.

Classifications used

The Classification of Individual Consumption by Purpose (COICOP) is used in the Consumer Price Index and the Harmonised Index of Consumer Prices. The classification has been confirmed with Council Regulation (EC) No 2214/96.

NUTS 2 is used as the regional classification in the Consumer Price Index.

Data collection methods and data sources

Each mid-month, Statistics Finland’s interviewers collect around 52,000 prices from approximately 2,700 outlets for the indices. The outlets included in the collection are drawn partly by random sampling and partly by judicious sampling. In addition, price data are gathered by centralised collection by Statistics Finland. Price data are gathered also from other statistics, such as Statistics Finland's statistics on the rents of dwellings, statistics on real estate prices, the Real Estate Price Index and the Building Cost Index. The National Research and Development Centre for Welfare and Health, the Social Insurance Institution and certain other authorities also produce data for the Consumer Price Index.

Data collections

Updating frequency

Monthly.

Time of completion or release

The indices are published on the 14th day of the month following the statistical reference month. If the day concerned falls on a weekend or a public holiday, the statistics are published on the weekday nearest to it.

The preliminary Harmonised Index of Consumer Prices data for the euro area are published on the Eurostat’s Internet pages a few days after the end of the statistical reference month. Eurostat published the final detailed data by country in its own release generally some days after the national day of publication.

Time series

The Consumer Price Index is available by the COICOP classification since 1995 and by the old classification since 1981.

The Cost-of-living Index has been calculated monthly since 1951. Data are available from 1914 onwards by special order.

Data on the Harmonised Index of Consumer Prices are available from 1996 onwards.

Keywords

consumer price index, consumer prices, cost of living, cost-of-living index, harmonised index of consumer prices, indices, inflation, international comparison, price indices, prices

Contact information

http://tilastokeskus.fi/til/khi/yht_en.html


Last updated 15.09.2011

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