Supplement to the April 1978, Monthly Abstract of Statistics REVISION OF THE CONSUMERS PRICE INDEX 1977 The Department of Statistics has revised the Consumers Price Index. The original index was described in a Supplement to the April 1975, Monthly Abstract of Statistics, and a Statistical Bulletin which was issued in February 1976. The Consumers Price Index measures changes in the general level of the price of goods and services which households purchase; it thus pro- vides the best available measure of the effect of changes in retail prices on personal expenditure. The present index is based on the report of the Consumers Price Index Advisory Committee which met in 1971. Members of the Committee represented the Federations of Employers, Farmers, Labour and Retailers, and the Combined State Services Organisation, the Consumer Council, the National Council of Women, and academic and statistical experts. They formulated the principles of a revised Consumers Price Index which was first compiled in 1975. The index as now updated follows these principles, one of which was that the index should be revised at least once every five years. This was to ensure that weights, items, methods of pricing and the selection of outlets be kept up-to-date. As a result of this recommendation, the Consumers Price Index is now subject to a major review every six years and a more limited up- dating every three years. The present revision of the Index is thus a limited one. Later in 1978 the Advisory Committee will be reconvened to initiate a major revision to be completed in 1980. The revision has been concerned with updating the expenditure pattern of the Index, incorporating up-to-date population weights for the market centres, reviewing the items which are priced and the retail outlets from which these prices are ob- tained. No changes have been made to the concepts of, and the definitions used in,the Index nor to the areas of expenditure, market centres or households covered by the index. These will be subject to the major review due to be completed in 1980. The main source of data for the expenditure weights was the Household Sample Survey for the year ended 31 March 1977. The expenditures obtained in this Survey were repriced at fourth quarter 1977 prices to constitute the base expenditure aggregates. However in the case of houses, flats and building sections, because the Household Sample Survey did not give adequate coverage of all transactions in real estate, special sample surveys were used to collect data on such expenditure. In the regular compilations made for pricing purposes data are obtained for sales of houses and sections for six monthly periods. These data however are not available from Valuation Department records until some two and a half months after the end of the period. This means that a change in property prices is not reflected in the Consumers Price Index until up to nine months after it has occurred. Similarly building costs take three months to be reflected in the index. So far it has not proved possible to effect any practical improvements to these delays, and their implications should be recognised. The revised index has an expression base December quarter 1977 (=1000) as compared with December quarter 1974 (=1000) for the one it replaces. It will continue to be compiled quarterly, with the index for the food group being issued monthly. Prices will be collected in twenty five market centres throughout New Zealand, the average price for each centre being incor- porated into the index. There will be separate indexes for: — Each of the seven chief market centres (Auckland, Hamilton, Napier-Hastings, Palmerston North, Wellington-Hutt, Christchurch, Dunedin). All seven chief market centres combined. Each of the ten larger market centres (Whangarei, Tauranga, Rotorua, Gisborne, New Plymouth, Wanganui, Masterton, Nelson, Timaru, Invercargill). All ten larger market centres combined. New Zealand as a whole [twenty-five market centres combined (i.e. those listed above and Tokoroa, Whakatane, Taupo, Hawera, Blenheim, Greymouth, Ashburton, and Gore)]. The following table summarises the changes that have been made to the index as a result of this latest revision. Percentage of Total Index Grcxjp Expenditure Covered by the Index at the Fourth Quarter of 1974 1977 Food 17.82 19.12 Housing 27.80 23.53 Household Operation 14.31 17.04 Apparel 8.55 7.95 Transportation 14.70 13.84 Miscellaneous 16.82 18.52 Total 100.00 100.00 This change in the weighting is detailed in Table 3. Tables 1 and 2 set out the regimen of the new index, while Tables 4 and . 5 provide long-term historical series by linking with the previous Consumer Price Indexes and other indexes of retail prices. The first revised All Groups Consumers Price Index will be the March quarter 1978. The Department of Statistics will be issuing a Statistical Bulletin giving a more comprehensive description of the nature and scope of the Revised Consumer Price Index, the methods of its construction and calculation, and its relationship to past Consumers Price Indexes. E.A. HARRIS Government Statistician Department of Statistics, Wellington. March 1978.
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Supplement to the April 1978, Monthly Abstract of Statistics
REVISION OF THE CONSUMERS PRICE INDEX 1977 The Department of Statistics has revised the Consumers Price Index. The original index was described in a Supplement to the April 1975, Monthly Abstract of Statistics, and a Statistical Bulletin which was issued in February 1976. The Consumers Price Index measures changes in the general level of the price of goods and services which households purchase; it thus provides the best available measure of the effect of changes in retail prices on personal expenditure. The present index is based on the report of the Consumers Price Index Advisory Committee which met in 1971. Members of the Committee represented the Federations of Employers, Farmers, Labour and Retailers, and the Combined State Services Organisation, the Consumer Council, the National Council of Women, and academic and statistical experts. They formulated the principles of a revised Consumers Price Index which was first compiled in 1975.
The index as now updated follows these principles, one of which was that the index should be revised at least once every five years. This was to ensure that weights, items, methods of pricing and the selection of outlets be kept up-to-date. As a result of this recommendation, the Consumers Price Index is now subject to a major review every six years and a more limited updating every three years. The present revision of the Index is thus a limited one. Later in 1978 the Advisory Committee will be reconvened to initiate a major revision to be completed in 1980.
The revision has been concerned with updating the expenditure pattern of the Index, incorporating up-to-date population weights for the market centres, reviewing the items which are priced and the retail outlets from which these prices are obtained. No changes have been made to the concepts of, and the definitions used in,the Index nor to the areas of expenditure, market centres or households covered by the index. These will be subject to the major review due to be completed in 1980.
The main source of data for the expenditure weights was the Household Sample Survey for the year ended 31 March 1977. The expenditures obtained in this Survey were repriced at fourth quarter 1977 prices to constitute the base expenditure aggregates. However in the case of houses, flats and building sections, because the Household Sample Survey did not give adequate coverage of all transactions in real estate, special sample surveys were used to collect data on such expenditure.
In the regular compilations made for pricing purposes data are obtained for sales of houses and sections for six monthly periods. These data however are not available from Valuation Department records until some two and a half months after the end of the period. This means that a change in property prices is not reflected in the Consumers Price Index until up to nine months after it has occurred. Similarly building costs take three months to be reflected in the index. So far it has not proved possible to effect any practical improvements to these delays, and their implications should be recognised.
The revised index has an expression base December quarter 1977 (=1000) as compared with December quarter 1974 (=1000) for the one it replaces. It will continue to be compiled quarterly, with the index for the food group being issued monthly. Prices will be collected in twenty five market centres throughout New Zealand, the average price for each centre being incorporated into the index. There will be separate indexes for: —
Each of the seven chief market centres (Auckland, Hamilton, Napier-Hastings, Palmerston North, Wellington-Hutt, Christchurch, Dunedin).
All seven chief market centres combined.
Each of the ten larger market centres (Whangarei, Tauranga, Rotorua, Gisborne, New Plymouth, Wanganui, Masterton, Nelson, Timaru, Invercargill).
All ten larger market centres combined.
New Zealand as a whole [twenty-five market centres combined (i.e. those listed above and Tokoroa, Whakatane, Taupo, Hawera, Blenheim, Greymouth, Ashburton, and Gore)].
The following table summarises the changes that have been made to the index as a result of this latest revision.
Percentage of Total Index Grcxjp Expenditure Covered by the
This change in the weighting is detailed in Table 3. Tables 1 and 2 set out the regimen of the new index, while Tables 4 and . 5 provide long-term historical series by linking with the previous Consumer Price Indexes and other indexes of retail prices. The first revised All Groups Consumers Price Index will be the March quarter 1978.
The Department of Statistics will be issuing a Statistical Bulletin giving a more comprehensive description of the nature and scope of the Revised Consumer Price Index, the methods of its construction and calculation, and its relationship to past Consumers Price Indexes.
E.A. HARRIS Government Statistician
Department of Statistics, Wellington. March 1978.
2
TABLE 1 REGIMEN OF CONSUMERS PRICE INDEX, DECEMBER QUARTER 1977
Grouping and Commodity or Service Base
Expenditure Weight(')
Percentage of Total
Grouping and Commodity or Service Base
Expenditure WeightC)
Percentage of Total
1. FOOD (a) Fruit and Vegetables (i) Fresh Fruit and Vegetables (see
(Hi) Cereals and Cereal Products Breads, Biscuits, and Cakes Breads Biscuits Cakes.. Total, Breads, Biscuits, and Cakes
Other Cereals and Cereal Products Breakfast flake biscuits Cake mix Custard Powder, packaged Flour, white Oatmeal, packaged Rice .. Total, Other Cereals and Cereal Products Total, Cereals and Cereal Products
(iv) Jams and Spreads Honey .. Jam Marmalade Peanut butter Vegetable extract
Chicken, cooked, hot .. .. 0.16 Fish, fried, hot .. .. .. 0.27 Hamburger, hot .. 0.13 Pie, meat, hot .. .. 0.13 Sandwich .. .. 0.36
Total, Take Aways 1.05 Total, Other Foods .. 11.05
TOTAL, ALL FOODS .. 19.12
2. HOUSING (a) Rentals fit State and Municipal Dwelling Rentals , 0 3 r
Houses , | 0 , 0.91 Total, State and Municipal Dwelling Rentals 0.91
(ii) Other Dwelling Rentals Houses .. .. . . 1 . 1 6 Flats .. .. .. 1.96 Total, Other Dwelling Rentals 3.11 Total, Rentals 4.02
(b) Home Ownership (i) Purchase of Dwellings
Previously-occupied house .. .. 6.26 Previously-occupied flat .. .. 0.24 Newly-erected house .. .. 0.78 Newly-erected flat.. .. 0.64 Section .. .. 0.52 Erection of dwelling (including additions and alterations to existing dwellings) 3.14
Total, Purchase of Dwellings .. 11.57 (ii) Expenses of Purchase and Financing of
Ownership of Dwellings Specialists'fees and stamp duty .. 0.46 Interest on mortgage, mortgage repayment insurance, and contribution to Housing Corporation Reserve Fund .. 0.93 Total, Expenses of Purchase and Financing of Ownership of Dwellings 1.39
(Hi) Maintenance Expenditure, Rates and Insurance
Contractors' charges for maintenance jobs .. 1.83 Timber .. 0.53 Concrete blocks .. .. .. 0.42 Wallboards and insulating materials .. 1.06 Paint and wallpaper .. .. 0.88 Cartage .. .. 0.11 Rates, local authority .. .. 1.32 Insurance on house .. .. 0.40 Total, Maintenance Expenditure, Rates and Insurance 6.54
Total, Home Ownership .. 19.50 TOTAL, HOUSING .. 23.53
3. HOUSEHOLD OPERATION (a) Fuel and Light
Coal, delivered Electricity Gas Oil, domestic heating
Total, Fuel and Light (b) Household Furnishing (i) Household Appliances
Electric Household Appliances Blanket Cake mixer Clothes dryer, tumbler Drill, portable Freezer Frypan Iron .. Jug Radiator Radio.. Range Razor.. Refrigerator Sewing machine Stereo Tape recorder Toaster Television sets, black and white,
and colour Vacuum cleaner Washing machine ..
Total, Electric Household Appliances Other Household Appliances
Motor mower Stroller
Total, Other Household Appliances Total, Household Appliances
(ii) Furniture Bedroom suite, and tallboy Dining room and lounge suites and cocktail cabinet
5. TRANSPORTATION (a) Public Transport (i) Land Travel
Urban and suburban bus and rail fares 0.53 Long distance bus and rail fares .. 0.11 Taxi fares 0.25 Rental car hire .. .. .. 0.03 Total, Land Travel .. 0.93
(ii) Air Travel Airfares .. 0.22
Base Grouping and Commodity or Service Expenditure
WeightC)
Percentage of Total
(ii) Motor Vehicle Running and Maintenance Petrol .. .. 3.90 Lubrication .. .. .. 0.16 Tyre and tube, including retread .. 0.45 Decarbonise and valve grind .. .. 0.41 Overhaul of brakes .. 0.41 Overhaul of gearbox .. 0.62 Reconditioned short block .. .. 0.59 Annual registration .. .. 0.58 Driving licence .. .. .. 0.04 Driving-school fee .. .. 0.06 Insurance .. .. .. 0.71 Total, Motor Vehicle Running and Maintenance 7.94 Total, Private Transport .. .. 12.62
TOTAL, TRANSPORTATION .. 13.84
6. MISCELLANEOUS (a) Tobacco and Alcohol (i) Tobacco, Cigarettes, and Requisites
Cigarettes, including cigars .. .. 2.24 Tobacco, pipe and cigarette .. .. 0.17 Matches .. .. 0.07 Total, Tobacco, Cigarettes, and Requisites .. 2.48
(ii) Alcohol Beer, draught
Hotel or tavern sales of draught beer (including lager type beers and stout) sold by the glass, or flagon or jug .. 1.34
Beer, bottled and canned Bottled and canned beers consumed in hotel or tavern or purchased for consumption off the premises, wholesale and retail .. .. 1.55
Spirits Spirits consumed in hotel or tavern or purchased for consumption off the premises, wholesale or retail .. 1.67
Wines Local and imported wines purchased wholesale or retail .. .. 0.83 Total, Alcohol.. .. .. 5.40 Total, Tobacco and Alcohol 7.88
(Hi) Sea Travel and Transport of Vehicles Inter-island passenger fares and vehicular transport charges 0.08 Total, Public Transport 1.22
(b) Private Transport (i) Purchase of Vehicles
Car, new 1.96 Car, used .. 2.43 Motorcycle, new 0.14 Bicycle .. 0.14
Total, Purchase of Vehicles .. 4.68
(b) Other Supplies (i) Medical and Health Supplies
TABLE 1 REGIMEN OF CONSUMERS PRICE INDEX, DECEMBER QUARTER 1977 - continued
Grouping and Commodity or Service Base
Expenditure WeightC)
Grouping and Commodity or Service Base
Expenditure WeightC )
Percentage of Total
(c) Other Services (i) Health Services (over and above General
Medical Services Benefits) Optometrists' fees .. .. .. 0.21 Dentists' fees .. 0.38 General medical practitioners' fees (over
and above General Medical Services Benefits) 0.29 Medical specialists' fees (over and above General Medical Services Benefits) 0.15
Private general hospital fees (over and above General Medical Services Benefits) .. 0.08
Total, Health Services . . 1 . 1 0
(ii) Recreational, Cultural, and Educational Services
Admissions to concerts and cinemas .. 0.75 Admissions to games and sports events 0.12 Fishing licence .. .. 0.03 Music, singing, etc., tuition fees 0.09 Primary, secondary and tertiary tuition
and examination fees 0.45 Sightseeing and scenic tours .. 0.05 Subscriptions to sports and other clubs 0.30
Total, Recreational, Cultural, and Educational Services 1.79
Percentage of Total
6. MISCELLANEOUS — continued (b) Other supplies - continued (ii) Cosmetics
(v) Leisure and Recreational Supplies Boat and boating equipment .. 0.28 Photographic equipment, and supplies 0.38 Caravan 0.31 Cassettes and gramophone records .. 0.27 Children's toys .. 0.35 Equipment for sports, games, and tramping.. 0.55 Musical instruments .. 0.12 Swimming pool .. 0.03 Typewriter .. .. 0.02
Total, Leisure and Recreational Supplies .. 2.31 (vi) Newspapers, Magazines, and Books
Newspapers .. .. 0.27 Magazines and periodicals .. .. 0.34 Books, popular reading .. .. 0.37 Book exchange fees 0.01 Educational text-books 0.13 Total, .Newspapers, Magazines, and Books .. 1.12
Total, Other Supplies 5.94 (' )The estimated quantities of commodities purchased in the year ended March 1977 have been repriced with the average prices of the fourth quarter
1977 to provide the base expenditure of the index — base: fourth quarter 1977 (—1000). For convenience of presentation, the figures shown in this published table have been rounded (independently) to fewer decimal places than are used in the calculations. Because of this rounding, the sums of the weights of the individual items as shown in the table are not always identical with the total.
(Hi) Accommodation, Board, and Lodging Board at schools Licenced hotel tariffs Private hotel tariffs.. Motel tariffs and motor camps charges Total, Accommodation, Board, and Lodging
(iv) Credit Services Hire purchase charges Total, Credit Services
(v) Personal Services Funeral, burial, and cremation fees Haircuts Hairset, woman's Labour union dues .. Watch repairs
Total, Personal Services Total, Other Services
TOTAL, MISCELLANEOUS
GRAND TOTAL, A L L GROUPS
0.06 0.11 0.05 0.36
0.58
0.31 0.31
0.15 0.21 0.23 0.22 0.10 0.92 4.70
18.52
100.00
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TABLE 2 REGIMEN OF CONSUMERS PRICE INDEX, DECEMBER QUARTER 1977 FRESH FRUIT AND VEGETABLES
Commodity Percentage Expenditure at Base Price (1)(2)
For convenience of presentation the figures shown here have been rounded (independently) to fewer decimal places than are used in the calculations. Because of this rounding sums of the individual items may not always appear identical with the totals.
The expenditure on fresh fruit and vegetables in the base quarter (quantities for year ended March 1977 at December quarter 1977 average prices) expressed as a percentage of all expenditure was 2.21. This total is assumed to be a constant for every month of the year but the basket of fresh fruit and vegetables varies according to availability.
< 3 * A weight is alloted for Lemons in November, but is too small to be recorded here.
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TABLE 3 CONSUMERS PRICE INDEX - COMPARISON OF THE BASE EXPENDITURE WEIGHTING OF DECEMBER QUARTERS 1974 and 1977
1974 and 1977 Regimen Percentage of Total
December Quarter 1974 December Quarter 1977
TOTAL EXPENDITURE COVERED Food Fruit and Vegetables Fresh fruit and vegetables Processed fruit Processed vegetables Meat, Fish and Poultry .. Meat
Beef and veal Hogget and lamb Pork Smallgoods and prepared meats
Fish Poultry Other Foods Eggs Dairy products Cereals and cereal products
Breads, biscuits and cakes Other cereals and cereal products ..
Jams and spreads Beverages .. Other grocery foods Soft drinks, fruit juice and ices Sweets, potato chips, peanuts Meals away from home .. Take aways..
Housing Rentals State and municipal dwelling
rentals Other dwelling rentals .. Home Ownership Purchase of dwellings Expenses of purchase and financing of ownership of dwellings Specialists' fees and stamp duty Interest and other charges on mortgage..
Maintenance expenditure, rates and insurance ..
Household Operation Fuel and Light Household Furnishing .. Household appliances
Electric household appliances Other household appliances
Furniture .. Floor coverings Household textiles Household equipment and utensils .. Household Supplies and Services Household supplies Household services
Post Office charges Other household services
100.0 17.82
2.91
5.19
9.72
27.80 3.50
24.30
14.31 1.98 7.95
4.38
2.24 0.33 0.34
4.47
0.39 0.33
0.59 1.39 1.80
0.23 0.49 1.20 0.85 0.66 1.83 0.67
0.72 2.78
16.94
2.38
4.98
2.67
2.16 0.97 1.03 1.11
1.56 2.82
100.0 19.12
2.95
5.12
1.82 1.16 0.29 1.20
11.05
1.46 0.34
23.53 4.02
19.50
0.97
1.41
17.04 2.77 9.33
2.41 0.26
4.94
2.21 0.37 0.37
4.39
0.40 0.34
0.51 1.61 2.12
0.23 0.95 1.05 0.96 0.72 1.87 1.05
0.91 3.11
11.57
1.39
6.54
4.02
2.27 1.07 0.88 1.09
1.53 3.40
1.97 0.98 0.32 1.10
1.72 0.40
0.46
0.93
3.76 0.25
1.39 1.43
1.80 1.60
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TABLE 3 CONSUMERS PRICE INDEX - COMPARISON OF THE BASE EXPENDITURE WEIGHTING OF DECEMBER QUARTERS 1974 and 1977 - continued
Transportation Public Transport Land travel .. Air travel Sea travel and transport of vehicles .. Private Transport Purchase of vehicles Motor vehicle running and
maintenance
Miscellaneous Tobacco and Alcohol Tobacco, cigarettes and
requisites .. Alcohol Other Supplies Medical and health supplies Cosmetics .. Personal goods
Toiletries .. Other personal goods ..
Stationery supplies Leisure and recreational supplies Newspapers, magazines and books . Other Services Health services (over and above
Social Security) Recreational, cultural and educational services
Accommodation, board and lodging. Credit services Personal services
1.79 0.58 0.31 0.92
FOOTNOTE
For convenience of presentation the figures shown have been rounded (independently) to fewer decimal places than are used in the calculations. Because of this rounding, the sums of constituent items are not always the same as their totals.
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RETAIL PRICES INDEX NUMBERS -FOOD AND A L L GROUPS LONG-TERM LINKED HISTORICAL SERIES