Harmonised Index of Consumer Prices

Survey method and source data

Sample survey on consumer prices

The prices of all goods and services, except for the prices of fuels for transport, are recorded every month from 4^th to 20^th date. Fuels for transport prices are recorded from 1^st to 25^th date. Qualitative goods with price discounts offered to all consumers are also taken into account in price collection. The prices of goods are used to calculate the HICP of the month in which they were observed, whereas the prices of services are used to calculate the HICP of the month in which the consumption of the service at the price recorded can commence.

Price collection is performed by trained CSB employees – price collectors.

To ensure adequate representation of goods and services, which require larger share of household expenditure, in the overall HICP, the weights representing the proportion of expenditure on each individual commodity to the total household expenditure are computed.

The weights used for index calculation are annual average weights derived mainly from the National Accounts and Household Budget Survey. Additional sources used to calculate the weights include administrative data, branch statistics data, as well as information provided by enterprises and retailers. The weights reference period is the year T-2. The weights are updated annually and price–updated to December T-1.

The outlets, from which prices are collected, are chosen to represent the existing trade and services network, and usually they are based on the three main criteria: popularity among consumers, significant turnover from consumer sales and availability of goods and services included in the HICP basket. The sample of price recording places is regularly updated. If a shop is closed down or liquidated, it is replaced by another shop of an equal significance. The sample also includes open markets.

Statistical population

Population coverage

The HICP covers the whole resident population of the country, including persons living in institutional households (social care institutions, children’s homes, prisons, etc.). The HICP does cover expenses of non-resident travellers.

Geographical coverage

The consumer price survey is conducted in Riga and 10 other towns. Using population weights survey data are generalized on all country: on both urban and rural territories.

Item coverage

The HICP covers the prices paid for goods and services in monetary transactions. The HICP excludes illegal goods and services, gifts, expenditure on the owner-occupied housing, expenditure on gambling and lotteries as well as interest and credit charges.

Sample size

In 2019, the HICP "basket" contains 514 goods and services the prices of which are recorded regularly. Approximately 2 -thousand various trade and services outlets are surveyed. In total, about 25-thousand prices are observed each month.

Average number of prices/ goods and services in consumption groups observed during a month

	Prices	Goods and services
01 Food and non-alcoholic beverages	6 640	129
02  Alcoholic beverages and tobacco	650	12
03 Clothing and footwear	2 390	65
04 Housing, water, electricity, gas and other fuels	1 360	30
05 Furnishings, household goods and cleaning	2 070	54
06 Health	1 450	34
07 Transport	2 930	47
08 Communication	420	13
09 Recreation and culture	4 600	55
10 Education	180	9
11 Restaurants and hotels	700	16
12 Miscellaneous goods and services	1 770	50

Specifications for goods and services under observation are kept unchanged during the whole year.

Statistical processing

Calculation method

At first, the average price of products and services collected in localities is calculated. It is calculated as simple arithmetic mean of the prices of goods and services surveyed. From all the average prices collected in localities, the average price for the whole country of each product and service is calculated using population weights.

Afterwards, the price index of each good and service (lower-level price index) is calculated. Price indices of lower aggregation levels are calculated as the ratio of arithmetic mean prices in the comparison and to that in the reference periods.

For the calculation of higher level (consumer group) price indices and the overall HICP a Laspeyres-type formula that expresses the weighted arithmetic mean value of the lower-level price indices is used:

$I^{T/0} =\sum\limits _{J}$ $w^{0}_{J}$ $*\ I^{T/0}_{J}$ , where

$I^{T/0}$ – the overall Harmonised Consumer Price Index in the period T, compared to the period 0 (the reference period);

$w^{0}_{J}$ – the share of the product j in the consumer basket in the reference period;

$ I^{T/0}_{J}$ – the price index of the product j in the period T, compared to the period 0 (the reference period).

The reference period used in the HICP calculations is the average value of 2015 (2015 = 100). If December of each year is the linking month, then price index in month m in year G is calculated as follows:

$I^{m,G}_{0} =I^{Dec,0}_{0} *\left(\prod\limits ^{G-1}_{g=1} I^{Dec.g}_{Dec.g-1}\right) *I^{m,G}_{Dec,G-1}$, where

$I^{m,G}_{Dec,G-1}$ – the latest link in the chain (price index in the month of the comparison year, compared to the December of the previous year);

$I^{Dec,0}_{0}$ – the link of the chain, which is calculated from historical data by moving from December as reference period to the average value of the year.

Reference period

The reference period of prices is December of the previous year. To calculate the price changes in a longer time period, the price indices of each year are chained in one time series with the same reference period.

The HICP reference period is the year 2015, expressed by 100 index points (2015 = 100). The price changes during a month, year or any other period are calculated on the basis of price indices. The price indices with the reference period 2010 = 100, 2005 = 100, 2000 = 100 or December 1990 = 100 are used to calculate the price changes over a longer period of time.

Data revision

The published data are final and are not revised.

Classifications

All goods and services of the HICP basket are grouped according to the European Classification of Individual Consumption by Purpose (ECOICOP). The data are published at the level of ECOICOP groups, classes and subclasses.

EICOICOP is available in RAMON classification server.

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