Harmonized Index of Consumer Prices Price Statistics in the European Union National and Local Dimens

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Harmonized Index of Consumer PricesPrice
Statistics in the European UnionNational and
Local Dimensions

• Carsten Olsson
• Eurostat

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HICPContent

• Why is it needed?
• What is it?
• What are the roles and responsibilities at
• international level,
• national level, and
• local level

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HICPWhy is it needed

• Required by EU Treaty (Maastricht Treaty)
• Used by ECB for their monetary policy
• Different purpose than national CPIs
• but still use the same price observations for
  most expenditure groups

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HICPWhat is it?

• Development started 1993 Series start Jan-96
• Methodology based on BEST practices
• CPI experts
• 15 Member States, and
• 3 EEA countries, 10 Candidate Countries
• Using national experiences
• Designed for International Comparison
• Produce COMPARABLE Price Indices

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HICP - International DimensionBest Practices

• Several Council and Commission Regulations
• Population and Geographical Coverage
• Expenditure coverage (HFMCE)
• EA formulae
• Quality Adjustment
• Sampling of outlets and products

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HICP - International DimensionBest Practices
(continued)

• Sales prices
• Timing
• Health, Education, and Social Protection

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An example of improved comparability (1)
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An example of improved comparability (2)
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HICP - International DimensionBest Practices
(continued)

• Not covered yet
• Treatment of Seasonal Items
• Price collection period
• Clarifications for Quality Adjustment and
  Sampling
• Owner Occupied Housing

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HICP - International Dimension

• Eurostat and Member States (National Statistical
  Institutes)
• Developing methodology for the HICP through
  discussions
• Several meeting every year
• Defining rules (Regulations)
• Quality Control
• Eurostat compiling euro-zone HICP

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HICP - National Dimension

• ISTAT
• Responsible for implementation of Regulations
  covering the HICP
• Responsible for compilation and transmission of
  national HICP to Eurostat
• Responsible for Quality Control
• Responsible for further input to the EU
  harmonization process

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HICP - Local dimension Municipalities in Italy

• Responsibilities, for example
• Outlet selection
• Price collection
• Quality control
• Training of price collectors
• Selection of representative products
• (Compilation of local indices)
• Responsible towards and together with ISTAT

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HICP - Local dimension Municipalities in Italy

• But also responsible for
• Implementation of HICP Regulations as far as
  changes are required at local level

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HICP - Local DimensionSpecific Italian Issues

• Sales prices (solved)
• Frequency of price collection, quality adjustment
  and imputation of past prices

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HICP - Local DimensionSpecific Italian Issues

• Price collection period
• Representative of the month
• Streamline production process
• Eurostat still needs provisional index from main
  municipalities at end of month (estat-hicp_at_cec.eu.
  int)

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HICP Conclusion

• Need good co-operation
• Eurostat ? ISTAT
• ISTAT ? Municipalities
• Quality Control at all levels
• For example in price collection, selection of
  outlets, products, etc.
• Training
• Learn from each other

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HICPConclusion

• Implementation of HICP Regulations
• Aim is always
• Best methodology
• Greater comparability
• Your work is required but also appreciated
• estat-hicp_at_cec.eu.int
• carsten.olsson_at_cec.eu.int