Transcript Outline Introduction Methodology for compiling CPI Data Collection and Compilation S CA I. Introduction  Price statistics is one of the major statistical activities in the Central Statistical Agency (CSA)

Outline
Introduction
Methodology for compiling CPI
Data Collection and Compilation
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I.
Introduction

Price statistics is one of the major
statistical activities in the Central
Statistical Agency (CSA) of Ethiopia
Consumer Price Index (CPI) and Inflation
Rates are the most important
macroeconomic indicators
CPI measures the average change in price
of selected baskets of commodities
purchased by households over time.


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Introduction cont.
It shows how much the cost of living
has risen or fallen due to price changes
Inflation rate is the percentage change
in the general price level or CPI from
one year to the next
Inflation rate measures how fast prices
are rising
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Introduction cont.
CPI has paramount importance and widely
used to:
monitor the inflation rate and to take various
price adjustment policies
as tool in wage negotiation and in
determining the wage levels
adjust social security benefits (used to index
pensions and public service remuneration)
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Introduction cont.
set inflation rate targets for the
purpose of monitoring and evaluation
undertake various financial/budgetary
adjustment policy
deflate the household consumption
expenditure in national accounts
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Introduction cont.
The CPI results are used by many
organizations, such as:
Government Agencies,
Non Government Organizations (NGO’s)
International Organizations
Business Community that wish to monitor
change in general price movement and to
observe its effects on their program
implementation and policy decision.
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II. Methodology for compiling CPI
The Ethiopian CPI calculation is based
on HICE survey results
Relatively important (highly weighted)
items based from household
expenditure survey results are included
in market baskets of goods and
services.
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Methodology Cont.
CPI baskets should be manageable in
size
The Ethiopian CPI is based on fixed
items consumed in the base year and it
may become out dated over time
depending on changes in consumption
patterns of the society.
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Methodology Cont.
In revising the CPI every five years the following issues are
considered:
 Revision of index compilation formula, if necessary
 Selection of reference (base) year
 Fixing the selection of basket of commodities (based on
Consumption Structure)
 Assigning the expenditure weight
 All transactions need to be clearly defined and well specified
 Assigning the base price/reference price
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Methodology Cont.
Selecting a representative
markets/outlets
Conducting monthly price survey and
calculating the results. (Monitoring the
price change from the base year
/reference year).
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III. The Ethiopian CPI Data Compilation and Collection.
 Currently, CSA has 12 CPI's (11 regional and country
level)
 Each region has its own selected baskets of
commodities
 The country level CPI is calculated from regional CPI
by using weight matrix.
 The CPI is reviewed & reweighed almost every 5
years and the last CPI revision was done in 2007
based on 2004/05 HICES.
 The base period that has been adopted for our
current CPI is December 2006 = 100
 Each regional and country level CPI are based on
prices of 11 major groups.
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Ethiopian CPI Cont.
 These groups are basically based on the Classification of Individual Consumption by Purpose
(COICOP), with some country specific adjustment,
These groups are:
 Food,
 Beverages,
 Cigarette and Tobacco,
 Clothing and Footwear,
 House rent, Construction Material, Water, Fuel and Power,
 Furniture & Furnishings, Household Equipment and Operators
 Medical care and health,
 Transport and Communication.
 Recreation Entertainment and Education,
 Personal Care and Effects and
 Miscellaneous goods and Services
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The Ethiopian CPI cont.
The survey design is based on a market
based survey approach by selecting 119
representative market outlets.
These representative urban markets were
selected with the aim of achieving acceptable
coverage of both urban and rural markets in
the country.
For the Ethiopian CPI, about 400 goods and
services are priced every month.
The total number of price to be quoted in CPI
is about 140,000
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Ethiopian CPI cont.
 The price data collection activities for consumer products are done from the 1st
to 15th (on monthly basis) and the data collection activities for house rent is
done from 16th to 20th of the month (on quarterly basis).
 Data collection is based on objective measurement and interviewing the
retailers. The data collection activities for crops and vegetables are done by
actually measuring the weight of the crops and vegetables using kitchen
balance.
 Data quality:
 Enumerators Education Level: Diploma holders (12+2)
 Training: CSA has a detail instruction manual which explains the
concepts and procedure of the price data collection, so that all
enumerators will have common understanding and collect the
same product every time. At the beginning of every budget year,
a week training is provided for all price enumerators and
supervisors.
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Ethiopian CPI cont.
 Supervision: To insure data quality supervision is crucial and
the supervisors are instructed to perform on spot check and to
complete a review of all filled-in sheets in the field
 Data cleaning/price validation- After the prices data have been
entered and analysed, the prices which have been reported will
be compared with the prices reported by other data collectors.
If there is outlier appropriate corrective measure are usually
taken
 The Regional and Country CPI is compiled every month. The
CPI results are usually published and disseminated within 10
days in the following month.
 Dissemination Techniques: Our CPI results is disseminated for
users through hardcopy and CSA website (www.csa.gov.et)
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THANK YOU
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Joint UNECE/ILO Meeting on Consumer Price Indices
Geneva, 7-9 May 2008
Background Paper
The Ethiopian Consumer Price Index (CPI)
Methodology and Data Collection
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By
Yasin Mossa
Central Statistical Agency
Ethiopia