New trends reflected in CSO basket of goods
TINNED SPAGHETTI, suntan oil, collars of bacon, ladies’ slippers and court shoes, rented DVDs, the CD single and the man’s overcoat have all been declared old hat by the Central Statistics Office (CSO).
Along with 18 other items they have been pushed out of the basket of goods used to track inflation in favour of sunblock, iPads, smart TVs, mineral water, music downloads, smoothies and pregnancy testing kits.
Champagne and fine wines are also being taken out of the basket as, according to alcohol retailers, such high-end products make up less than 5 per cent of the total alcohol spend.
Boarding school fees are also now deemed to be insignificant for statistical purposes.
There is no place in the modern basket either for quick soups or ice-cream cakes.
Announcing the first changes to the way it measures consumer prices for five years, the CSO said the modifications were being made as a result of evidence of dramatically shifting spending patterns picked up by its price surveys, market research and media reports on changing trends
All told, 27 new items have been added to the basket of goods that the CSO uses to work out monthly price changes, while 26 items have been deleted.
The definition of a further 27 products has been modified – shampoo and conditioner have now become one for statistical purposes, while the sultana category has been widened to include other dried fruits.
Low-fat milk has replaced full-fat milk in the basket.
The size of the CSO basket of goods has gone from 616 to 632.
The consumer price index (CPI) is the official measure of inflation. Each month hundreds of part-time price checkers from the CSO visit a fixed panel of shops, supermarkets and other retail and service outlets throughout the State to record the prices of a wide variety of goods and services.
Prices are established for food, alcohol, tobacco, clothing and shoes, fuel and light, housing, durable household goods, other goods, transport, and services and related expenditure.
The basket also measures mortgage repayments, home insurance, motor tax and insurance, hairdressing and taxi fares.
The goods and services in the basket are worked out using information gleaned from the CSO’s household budget survey, and items are given degrees of importance or weightings based on the household expenditure information collected in the survey.
The CSO has decided to increase the weighting for elements such as transport to reflect the higher cost of petrol and diesel now when compared with 2007.
Health insurance, rent, electricity and third-level education have also seen their weighting increase as they make up a bigger percentage of consumer spending each month.
The statisticians have also changed the weighting for cars, package holidays, mortgage interest and major household appliances to reflect the fact that consumers in 2012 are spending considerably less on such goods and services than they were at the height of the boom in 2007.
It also said pricing locations have been reviewed, and a number of new towns have been added to replace some existing locations.
The CSO also announced methodological changes which will see the manner in which mortgage costs are worked out change significantly.
Until the beginning of this year, the CPI reflected only changes in the standard variable rate mortgages but now, reflecting the fact that standard variable products account for only a minority of mortgages, the weighted average interest rate will cover fixed, variable and tracker mortgage interest rates.
A new method of tracking price changes in mobile phone usage has also been introduced by pricing a number of typical consumer profiles covering light, medium and heavy users.
Bundled telecommunication services offering telephone and internet services are also included in the basket.
When it comes to alcohol and tobacco, the CSO has decided that it can no longer rely on the household survey as it has found that consumers underestimate how much of each they get through every month. “The danger with alcohol is that you might not remember how much you have got through, so it may just be an oversight,” said Steve McFeely.
In the future the CSO will rely on decidedly more sober Revenue officials for information on the nation’s drinking habits.