-base Carli using the average of long-term price relatives. The chained Carli price index has a definite upward bias. This chained version of the Carli index should not be used by NSOs for calculating elementary-level indices in the CPI.
1.148 With the introduction of the CPIManual in 2004, a major emphasis was placed on using geometric averaging when weights are not available for the individual prices in the CPI elementary indices. The geometric price index is known as the Jevons price index and is calculated either as the ratio of the
The Consumer Price Index Manual: Concepts and Methods contains comprehensive information and explanations on compiling a consumer price index (CPI). The Manual provides an overview of the methods and practices national statistical offices (NSOs) should consider when making decisions on how to deal with the various problems in the compilation of a CPI. The chapters cover many topics. They elaborate on the different practices currently in use, propose alternatives whenever possible, and discuss the advantages and disadvantages of each alternative. The primary purpose of the Manual is to assist countries in producing CPIs that reflect internationally recommended methods and practices.
5.1 Several factors will determine the choice of which price collection methods a national statistical office (NSO) uses, taking into consideration efficiency, accuracy, and representativity of consumers’ purchasing patterns. For example, local price collection is costly but can have the advantage of covering a wide range of locations and items, particularly for food, alcohol, tobacco, and durable goods such as clothing, furniture, and electrical products. On the other hand, central collection, either at the head office or in regional offices, can be cheaper and may be used for products where there are national pricing policies, as for rail fares, or where prices cannot be observed directly in retail outlets, such as for many professional services. With regard to representing consumers’ purchasing patterns, the price collection method also needs to reflect methods of shopping. For instance, internet purchases or goods purchased through mail order and catalogs need to be properly reflected in the sample.
6.1 Chapter 6 focuses on the treatment of temporarily and permanently missing varieties and their prices. While Chapter 5 focuses on the collection of data, Chapter 6 highlights the important role of the price collector in the context of the treatment of missing prices and starts by providing an overview of the matched-model method (MMM). While the MMM serves as the underlying method regarding the treatment of missing prices, the chapter describes how the MMM can potentially fail, the consequences of this failure, and how to deal with the effects of such failure on price measurement.
8.1 The purpose of this chapter is to provide a general description of the ways in which consumer price indices (CPIs) are calculated in practice. The methods used in different countries are not exactly the same, but they have much in common. There is clearly interest from both compilers and users of CPIs in knowing how most national statistical offices (NSOs) actually calculate their CPIs.
2.1 Chapter 2 begins with an overview describing the uses of the consumer price index (CPI). The primary uses drive the decisions regarding the concepts and scope for the index. As described in this chapter, countries face the reality of having to compile and disseminate a general-purpose index that tries to meet a variety of user needs. The System of National Accounts 2008 (2008 SNA) provides the general framework for the concepts used to compile the CPI. The chapter explores each of these concepts in detail and how they are applied to the CPI. The chapter concludes with a discussion of the recommended classification for the CPI. The Classification of Individual Consumption According to Purpose (COICOP) serves as the internationally recommended classification system for developing weights and compiling CPIs. The previous version of COICOP, adopted in 1999, was updated and has been released as COICOP 2018. The classification section highlights the key changes between COICOP 2018 and the previous version, and identifies some important issues for consideration as countries begin implementing the new classification system.