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Price Index News: January 2013

1. Short stories

Electronic gadgets in the consumers price index

Electronic gadgets in the consumers price index looks at the different gadgets used by households for entertainment over the past 60 years.

In addition, here is a pictorial summary of the gadgets that have been added to the consumers price index basket over the past 60 years, and how much they cost at the time.

The cost of a Christmas barbecue

Before Christmas, we used information collected for the November food price index to estimate that a barbecue dinner for a family of four, including steak, chicken, salad, pavlova, and nibbles, would have cost an average of $64.74. Alternatively, a traditional Christmas dinner of lamb, chicken, seasonal vegetables, pavlova, and nibbles for the same family would have cost $67.31. 

Cost of Christmas dinner on the rise summarises results. 

The cost of Christmas dinner – table lists the menu items and costs for the barbecue and traditional Christmas dinners in 2002, 2011, and 2012.

The cost of a Christmas barbecue infographic shows food costs for a Christmas barbecue in 2002 and 2012.


2. Working with others

Prices feature at New Zealand Statistical Association conference

Frances Krsinich, senior researcher in the Prices unit, attended the New Zealand Statistical Association conference in Dunedin on 29–30 November 2012.

She presented preliminary results from current research looking at the potential for decomposing property price measures for New Zealand into land and structure components, using Quotable Value sales and valuation data from Property IQ. This work is at an early stage; our work on the theoretical aspects is being done in collaboration with Statistics Netherlands. We intend to utilise the land and structure information in the valuation data to estimate hedonic indexes for each component separately.

Discussions with the Australian Bureau of Statistics

Statistics NZ staff from the Prices and Statistical Methods units travelled to Canberra in December 2012 for a three-day meeting with our Australian Bureau of Statistics counterparts.

The bilateral discussion gave us an opportunity to reflect on developments such as the recently implemented consumers price index (CPI) reviews in both countries. We also discussed challenging price measurement issues, progress on current projects, and possible future collaboration.

Our sessions covered:

  • CPI reviews and advisory committees
  • producers price index (PPI)  redevelopment programmes
  • house price measurement
  • research into measuring price change using scanner data and anonymised samples of bills
  • purchasing power parity (PPP) comparisons
  • labour price measurement
  • optimising CPI sample sizes
  • collection-related developments, including e-forms, handheld devices, and Internet price scraping.

The two prices teams hope to meet formally again in two years. In the meantime, we will continue to collaborate on topics of mutual interest and benefit, including PPI development, scanner data and sample of bills research, PPPs, and computer system and collection initiatives for prices. 


3. Virtual papers

Economic Measurement Group hears about scanner data

Collaborative research between Statistics NZ and Statistics Netherlands, on methodology for producing price indexes from scanner data, was presented to the Economic Measurement Group in November 2012.

Jan de Haan, of Statistics Netherlands, presented  Scanner data and the treatment of quality change in rolling year GEKS price indexes, which was co-authored with Frances Krsinich, of Statistics NZ’s Prices unit.

This paper describes a benchmark method that imputes price change for new and disappearing products, and against which other methods can be assessed.  We applied this method to New Zealand consumer electronics scanner data, to conclude that not imputing price change for these items can lead to an upward bias.

The Economic Measurement Group’s workshop is run in Sydney by the Center for Applied Economic Research of the University of New South Wales.


4. Nuts and bolts

Road and sea freight in the PPI

Compiling road and sea freight indexes in the PPI looks at how we compile the price indexes for road freight and sea freight in the producers price index (PPI) and how they have changed over time.

Personal effects in the CPI

Personal effects in the CPI explains the sources and methods used to compile the personal effects subgroup of the consumers price index (CPI). This subgroup had an expenditure weight of 0.48 percent of the CPI at the June 2011 quarter.

Purchase of motorcycles and bicycles in the CPI

Purchase of motorcycles and bicycles in the CPI explains the sources and methods used to compile the purchase of motorcycles and bicycles classes of the consumers price index. These classes had a combined expenditure weight of 0.20 percent of the CPI at the June 2011 quarter.


5. On the horizon

Summer seasonal goods

Some goods in the CPI basket are purchased mainly during summer. We conduct the CPI summer seasonal survey of these goods once a year, in the December quarter.

Summer seasonal goods in the basket include summer clothing, footwear, and sports equipment. We price these goods only in December quarters because they have a limited supply and demand in other quarters. We show changes in summer seasonal prices fully in December quarters – no change is shown in other quarters.

However, we also collect some outdoor-living equipment prices, such as those for barbecues, in March quarters.

Local authority rates in the CPI

The CPI Local Authority Rates Survey is conducted annually in the September quarter, for a sample of territorial authorities and regional councils. Rates are surveyed once a year because local authorities usually set their rates annually. While rate changes usually take effect from 1 July, not all territorial authorities and regional councils set rates during the September quarter. The small number of rates set after the September quarter, combined with the timing of survey returns and processing, result in rate changes being shown in both the September and December quarter CPIs. The remaining 11 percent of the weight in the sample of local authority rates will be included in the December 2012 quarter CPI.

Increases within the CPI ‘other private transport services’

Road user charges for a private motor car, managed by the NZ Transport Agency, increased 8.3 percent (or $3.69 per 1,000km) on 1 August 2012. Transaction fees associated with the purchase of road user charges fell and moderated this increase. The fuel excise duty on petrol also increased, by 2 cents per litre on 1 August 2012. Two-thirds of these price increases were shown in the September 2012 quarter CPI, while the remaining one-third will be shown in the December 2012 quarter.


6. Development updates

Reviewing the business price indexes

Statistics NZ is undertaking a rolling review of the business price indexes – the producers price index (PPI), the farm expenses price index (FEPI), and the capital goods price index. The review has two objectives: to maintain the relevance of these indexes and to collect commodity data for use in the national accounts.

We are surveying a sample of economically significant enterprises operating in New Zealand, to collect information on their supply and use of goods and services (commodities). We use information from the commodity data collection to balance the production and expenditure estimates of gross domestic product (GDP) within an input-output framework. Doing this requires us to compile tables that detail the supply and use of commodities, by industry.

We also use this commodity information, by industry, to establish lower-level weights for the business price indexes. These are used as deflators in producing a chain-volume measure of GDP.

We carried out the previous PPI redevelopment from 2004 to 2010. The current rolling review is the first to use the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06). As part of the review, the ANZSIC06 industries have been prioritised. We are reviewing industries on six-year cycles for most of them, and on either three-year or 12-year cycles for the remaining industries.
Currently, we are reviewing these industries:

  • primary metal and metal product manufacturing 
  • fabricated metal product manufacturing
  • printing
  • publishing
  • agriculture (including FEPI) 
  • electricity, gas, and water
  • telecommunication services
  • Internet service providers and data processing services
  • computer system design and related services
  • forestry and logging
  • aquaculture
  • fishing
  • hunting and trapping
  • agriculture, forestry, and fishing support services
  • petroleum and coal product manufacturing
  • basic chemical and basic polymer manufacturing
  • fertiliser and pesticide manufacturing
  • pharmaceutical, cleaning, and other chemical manufacturing
  • meat and meat product manufacturing
  • seafood processing
  • dairy product manufacturing
  • fruit, oil, cereal, and other food product manufacturing
  • beverage and tobacco product manufacturing
  • transport equipment manufacturing
  • electronic and electrical equipment manufacturing
  • machinery manufacturing
  • rail transport
  • water transport
  • air and space transport
  • scenic and sightseeing transport.

To date, we have used updated commodity proportions to help balance the production and expenditure estimates of GDP for the following industries:

  • primary metal and metal product manufacturing
  • fabricated metal product manufacturing
  • printing
  • publishing.

We have updated higher-level PPI commodity weights for both the printing, and publishing industries, based on information from the commodity data collection. This update was implemented through the annual PPI weight update, which took place for the March 2012 quarter.

We will implement lower-level PPI commodity weights and updated product samples for the printing, and publishing industries for the March 2013 quarter PPI, and for the primary metal and metal product manufacturing, and fabricated metal product manufacturing industries for the June 2013 quarter PPI.

For more information about the rolling business price index review, please contact:

Peter Campion
Wellington 04 931 4600

Progress with the CPI rolling review of retail outlets

We are busy with our ongoing rolling review of the retail outlets we collect prices from for the consumers price index (CPI).

The July 2012 issue of Price Index News has more information on the scope of the review.

We implemented the changes made to the first review group (clothing, footwear, and furniture) in Consumers Price Index: September 2012 quarter.

Changes made to the second review group (services, vehicles, and personal goods) will be implemented in Consumers Price Index: December 2012 quarter, to be released in January.

For the third review group, we reviewed the outlets visited for sports and stationery goods. The sample of retail outlets we visit has been reallocated for the following items tracked in the CPI, to better reflect their market shares:

  • outdoor furniture
  • barbecues
  • stationery
  • books.

We have also expanded price collection for CDs and books to include online retailers. Changes to this group will be implemented in Consumers Price Index: March 2013 quarter, to be released in April 2013.

For more information on the review, please contact:

Nick Martelli
04 931 4600

Producers price index review of scope and purpose

Statistics New Zealand is reviewing the scope and purpose of the producers price index (PPI). The PPI and the review are outlined here.

The PPI is a key economic indicator in most countries, including New Zealand. PPIs are constructed as either output indexes, measuring change in the prices that producers receive for their outputs; or input indexes, measuring change in the prices that producers pay for their inputs.

The PPIs produced by Statistics NZ are used to support the calculation of volume estimates of gross domestic product (GDP) in New Zealand’s national accounts. They are also used as indicators of short-term inflationary trends and in contract indexation clauses to reflect changes in costs or prices during the life of commercial contracts.

We have produced our PPIs in essentially their current form for the past 30 years. Over this time the indexes have been re-weighted and re-referenced several times. However, the underlying conceptual basis and coverage are largely unchanged.

As part of our goal to deliver accessible, relevant, and timely statistics for all New Zealanders, we need to ensure the statistics we produce meet the needs of our users, where possible. A formal review in which we consult our data users will ensure we understand their needs.

Key issues to be covered in the review include:

  • principal purpose of the PPI
  • other uses of the PPI
  • scope of the PPI
  • what should be published
  • alternative approaches for measuring business inflation.

A discussion paper should be available to the public on the Statistics NZ website by March 2013.  We will call for public submissions once the paper is released. 

Change to measuring financial services does not affect PPI

We recently changed the way financial services are measured in the national accounts – to align with the treatment recommended in the international System of National Accounts (SNA).

PPIs were primarily designed as deflators of the gross flows within the national accounts. It has been normal practice for us to update the PPI coverage in line with changes in the SNA, to retain coherence with the national accounts. As part of the PPI review we consulted key users for their views on aligning the PPIs with this latest change in the national accounts. Following this consultation, we decided to make no change to the PPI in the interim. The consensus among users was that there was no urgency to address the financial services issue in the PPIs immediately – any decision could wait until the formal PPI review was concluded in 2013. 

More information

Further information on the financial services issue is included in the data quality section of the Producers Price Index: September 2012 quarter, published on 19 November 2012. 

For more information on the PPI review of scope and purpose, please contact:

Henry Minish
04 931 4600


7. Making contact

CPI advisory committee 2013

Statistics NZ is convening a consumers price index (CPI) advisory committee. This committee will meet in May 2013 to undertake an independent review of the methods and practices used to compile the CPI, and to advise the Government Statistician on the CPI.

Statistics NZ will announce the committee members later in January 2013.

In February 2013, background and discussion papers prepared by Statistics NZ for the committee will be available to the public on the Statistics NZ website ( We will call for public submissions at this time.

The previous CPI revision advisory committee met in June 2004, with its recommendations informing the 2006 CPI review. For the papers prepared for the committee, and the committee’s report (including 20 recommendations), see 2004 CPI Revision Advisory Committee.

The 2013 committee's report and recommendations will inform the 2014 CPI review.

For more information on the 2013 CPI advisory committee, please contact:

Peter Campion
Wellington 04 931 4600


8. Release dates

Price index release calendar for the next three months

January 2013

Tue   15           Food Price Index: December 2012
Fri     18    M    Consumers Price Index: December 2012 quarter

February 2013

Tue    5     M     Labour Cost Index (Salary and Wage rates): December 2012 quarter
Thu   14            Food Price Index: January 2013
Wed  20    M     Producers Price Index: December 2012 quarter
Wed  20    M     Capital Goods Price Index: December 2012 quarter

March 2013

Fri      1     M     Overseas Trade Indexes (Prices): December 2012 quarter (provisional)
Fri      1     M     Overseas Trade Indexes (Volumes): December 2012 quarter (provisional)
Wed  13            Food Price Index: February 2013

M= Media conference

This issue of Price Index News was released on Thursday 10 January, 2013

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