1 Reflection consumers’ e- commerce change on the CPI Kyunghee Kim, Statistics Korea (KOSTAT) UNECE/ILO Meeting on Consumer Price Index

2 Contents I.Korean CPI outline II. Internet development in Korea III. E-commerce in Korean CPI IV. Conclusion

3 I. Korean CPI outline 1. Usage  Inflation measurement  Expenditure deflation at current prices or income  Indexation of social security benefit Pension, compensation, reparation

4 I. Korean CPI outline 2. Scope  Households Exclude households whose primary activity is farming or fishing  Geographical area 7 metropolitan area and 31 large cities  Outlets The PDS collects prices of an item in 150 local stores.

5 I. Korean CPI outline 3. Items and Weight  Items and weights are derived from the Household Income and Expenditure Survey (the HIES) conducted in 9000 households  Revision in every 5 years ending 0 or 5 Items, weight, and cities are changed The PSD prepares 2010 revision

6 4. Price Collection  Conduct regularly every month  Agricultural product, gasoline, golden ring Three times a month  Manufactured goods and services Once a month I. Korean CPI outline

7 II. Internet development in Korea  8 out of 10 households access the Internet Experience of Internet shopping No Experience of Internet shopping Total Male Female  6 out of 10 persons experience the Internet shopping

8 III. E-commerce in Korean CPI  For 19 items, the PSD has collected prices through the Internet shopping malls and produces the CPI since  The PSD prepares the revision of 2010 rebase  Three criteria for e-commerce’s items  Transaction percent  Survey availability  Different price trend

9 III. E-commerce in Korean CPI  Transaction values E-commerce and cyber shopping survey Ad hoc survey in the HIES households Items : Households appliances, Cosmetic, Books, Computers and other appliances

10 Commodity Group Increase rate ValuePercent Total10,67620, Clothes and fashion1,5833, Travel1,6042, Household appliances1,7862, Computer1,0272, Cosmetics5871, Books4961, III. Transaction Value by commodity (Unit : billion won)

11 III. E-commerce in Korean CPI  Survey Availability Items and Internet shopping malls Each product has its own popular shopping malls Pretest for 6 months and check survey availability

12 III. E-commerce in Korean CPI  Different price trend T-test of the means and variance between the prices of the Internet shopping malls and local stores Exclusion items which have the same trend

13 III. E-commerce in Korean CPI  Weight Households Income and Expenditure Survey could not provide information the goods are purchased by the on-line or off-line The PSD computes the weights of items for e- commerce by Wholesale and retail trade survey and E-commerce and cyber shopping survey

14 Commodity GroupValue (A)Value (B)(B/A)*100 Households appliances18,2022, Books5,9891, Cosmetics8, A : Wholesale and retail trade survey B : E-commerce and cyber shopping survey (Unit : billion won)

15 III. E-commerce in Korean CPI  Index The PSD weights the two relative prices to produce the item index Internet shopping malls & local stores Refrigerator index Internet shopping : Local stores : =120.5* *0.875

16 IV. Conclusion  Finalize the items and weights for e-commerce in December 2010  E-commerce’s impact on the CPI will be increased in 2010 rebase because of more items and weights

17 Thank you for your attention & Welcome any question