1 Experiences from compilation of the Hungarian CPI UNECE/ILO Meeting on CPI Geneva, May 2006 Hungarian Central Statistical Office Consumer Price Statistics Section

2 Difficult items – new circumstances pharmaceutical products (additional data source, changes in the subsidies) town gas (treatment of tariffs) airfares (timing of entering of prices) gambling (price determination)

3 1. Use of additional data sources - Pharmaceutical products Background regulated prices for all kind of medicines till November 2005 (from that time the non- subsidised medicines have recommended prices only) the larger part of medicines are subsidised (60-40%) the rate of the subsidy can be changed in every quarter of the year (it can be 100%, 90%, 70%, 50% or a fixed amount)

4 Pharmaceutical products Problem Reduction of the subsidies – parallel with the price increases the index of medicines jumped up

5 Pharmaceutical products Index178,4148,1150,8153,7141,6122,4114,0132,9 Weight0,70,81,11,31,41,71, Index126,0110,2109,3107,0 108,6 Weight1,71,92,12,2 2,3 CPIs for pharmaceutical products, previous year=100

6 Pharmaceutical products

7 Solution Enlarge the sample of medicines – cost effectiveness Use of some additional data sources besides the traditional data collection practice - administrative database

8 2. Treatment of tariffs – Town gas Background price is centrally fixed same in the whole country till 2003 there was one single tariff category from October 2003 there are different categories according to the quantity of consumption October a compensation system have been also introduced

9 Town gas Problem we publish monthly and annual average prices of selected goods and services the town gas has significant share in the consumption – we have to publish prices for it the ratio of the average prices gives a different result as the published index

10 Town gas CategoriesBase priceCurrent price Index 144,846,4103,6 105,2 105,1 247,951,5107,4 356,262,7111,6 441,942,4101,3 103,0 545,047,4105,4 653,358,7110,1 Total46,148,9106,0

11 Town gas Solution Publish three separate prices for the first three categories: consumption up to 1500 m m 3 over 3000 m 3

12 3. Timing of entering of prices into the index - Airfares Background Commission regulation pricing strategy of the companies traditional airlines low-cost airlines

13 Airfares Price (HUF)Condition 19500Budget 29500Smart choice 41000Great value 55000Fully Flexible (B) Fully Flexible (Y) Discounted Business Business Premium Business Ticket prices in the case of Hungarian airline

14 Airfares Prices of a ticket for a long weekend at the middle of March in the case of low-cost airlines Price collection timeWizzairSkyeurope 14 October November December January February Average price

15 Airfares Problem – question In which month shall we collect the price of a pre-selected flight?

16 Airfares Solution Start to collect prices 6 months in advance Apply geometric mean – there is not data on consumer behaviour about the time of booking Suppose that the consumer make his decision sensibly

17 Price determination – Gambling Background Commission Regulation (EC) No 1687/98 regarding the coverage of goods and services of the HICP states in Annex1b that ‘household final monetary consumption expenditure does not cover lotteries and gambling, neither the payment of the service charge to the unit organising the lottery or gambling, nor the residual current transfer that is paid out to the winners (although according to ESA service charge is included in final consumption expenditure)’.

18 Gambling Problem Hungarian CPI contains gambling In 2001 the ‘price’ of a lottery ticket was increased from 100 to 130 HUF At the same time the prize per ticket was also increased from 43,2 to 58,5 HUF How much was the real price increase?

19 Gambling Solution PeriodCost of ticket Prize per ticket Net lossNet loss (as % of the cost of one ticket) 1234=2-35=(2-3)/ ,256,8 t13058,571,555,0 % change+30,0+35,4+25,9-3,2

20 Thank you for your attention.