1 HICP experience in Latvia Prepared by Oskars Alksnis Central Statistical Bureau (CSB) of Latvia EU Twinning Project Forwarding Armenian Statistics Through Twinning AM09/ENP-PCA/TP/04 Component E: Harmonized Consumer Price Index Yerevan, 13 July 2012

2 Content of the presentation Organisational structure of price statistics Basic technical information about Latvian HICP Organisation of data collection for the HICP Tasks of central office staff in production of the CPI and HICP

3 Organisational structure Price statistics department Consumer price indices section Consumer price index Harmonized consumer price index Constant tax HICP Housing statistics Producer price indices section Producer price index Construction cost index Import/export unit value index Business service price index Purchaser power parities

4 Consumer price index family Consumer price index (CPI) – 1991 Harmonized Indices of Consumer Prices (HICP) – 1996 Harmonized Indices of Consumer Prices at Constant Taxes – 2003 Harmonized Indices of Consumer Prices for Administered prices – 2002 House price index (HPI) – 2008 (planed 2012) Owner-occupied price index (OOH) – 2010 (planed 2014)

5 Sample size and sample updating (both PCI and HICP) More than prices and tariffs collected monthly  Approximately prices are collected centrally About outlets 491 basic goods and services (elementary aggregates) Sample has been updated annually by reviewing the weights and by introducing of new significant goods and services.  Sources of information: market data, Purchasing Power parities data, shop chain and service provider’s information, price collector’s proposals

6 Base periods and weights Since 1996 item weights are updated annually Current weights used are based on non-stop HBS data within the period q. IV q. III 2011 inclusive Additional sources of information used for weights calculation:  National Accounts (NA) data  Branch statistics data  Data from producers  Data from shop chains and service providers Average prices of the December of previous year serve as a base for price comparisons CPI and HICP Index Reference Period is 2005=100

7 New commodities Expenditure at least one part per thousand (0.1%) of the total HICP Examples of the newly introduced goods and services in past few years:  Grain bread, grilled meat, fast food, energy drink, alcoholic cocktail, cardiogram, X-ray picture, GPS for cars, smartphone, mobile Internet service, DVD player, laptop computer, PC software, digital camera, bowling, package holidays to southern countries – «last minute» offers, service charge for money transfer using Internet bank, service charge for delivering the pension at home, etc.

8 Key organisational issues of price collection (1) 16 price collectors, including 5 in capital Riga  part time employees  staff members of Price statistics department  work at home (data entry into database)  equipped with laptop computer, and Internet access and mobile phone (bills paid by organisation)  equipped with detailed instructions and guidelines for price collection

9 Key organisational issues of price collection (2) Defined price collection period  Data collection period: from 4th to 20th of the reference month – every single outlet is contacted / visited once a month, and outlet visits are spread evenly over the period  only prices for fuels have been collected weekly  in line with HICP regulation on temporal coverage of price collection Defined data transmission timetable to central office  on of the reference month Two times per year data collection workbooks has been prepared for price collectors

10 Key organisational issues of price collection (3) Once every year price collectors are asked to provide information / proposals on newly significant goods and services as well as other information on technical and organisational issues Towards the end of year a list of new goods and services has been provided to price collectors in order to launch price collection (in December); Once a year evaluation of results of price collector’s performance has been carried out;  influencing the qualification and salary Once in two years training workshops for price collectors have been organised; Throughout the year random or targeted visits of price collectors have been carried out

11 Key organisational issues of price collection (4) Prices collected in 12 localities (towns)  Some structural reorganisation of the CSB as well as optimisation of the CPI/HICP sample had taken place  number of localities reduced since early 90-ties by three Central and local price collection  Central price collection for: tobacco products, rents, electricity, gas, reimbursed medical services and products, cars (new and used), fuels, passenger transport by rail and air, postal services, telecommunication services, computers and IT equipment, package holidays, education in universities, social protection, insurance, financial services.

12 Key organisational issues of price collection (5) Responsibilities of price collectors apart from price observations:  to detect temporary missing prices or out-of-season prices;  to replace items when it is appropriate to do so and make initial estimates of quality differences;  to validate data when prices have been entered into database (validation rules integrated into database software) and explain the reasons for large price differences;  provide proposals regarding newly significant goods and services (once a year).

13 Data collection workbook

Data input window

15 Responsibilities of central staff members Case-by-case data check at individual item level Imputations in case of temporary missing prices or prices in out-of-season period Quality adjustments in case of replacements Many-fold index comparisons and analysis (historical, spatial, producer, also market information) Preparation of the press release Further development of the index compilation methodology (implementation of EU regulations)

Data validation window

Data validation window (2)

Data validation window (3)

Data validation window (4)

20 Press release The press release "Report on Consumer Price Changes" has been issued each month on the 6 th working day following the reference month at 13:00 local time in Latvian and in English Ministry of Economy receives data one hour earlier. Price collectors receive a copies of press releases and other publications in order to distribute them among retailers (optional) No special press release for the HICP No special paper publication for the CPI and HICP – instead data at detailed level are available on the CSB website database

21 Other Publications Monthly Bulletin of Latvian Statistics - comprehensive collection of the statistical data in paper form Consumer Prices – quarterly bulletin on consumer prices in paper form Harmonized Indices of Consumer Prices (HICP) – on the CSB website data bases and sent to Eurostat Constant tax rate HICP - on the CSB website data bases and sent to Eurostat Methodological description of all indices – on the CSB website

22 Thank you for your attention!