A running series from Statistics New Zealand helping us make sense of the Food Price Index and the Consumers Price Index…
Priceshifting – What we buy
In recent years, about one sixth of our household spending has been on food. But what about the other five-sixths? What’s in the Consumers Price Index (CPI) provides an interesting snapshot.
The CPI measures changes in the price of goods and services purchased by households. The range of goods and services included in the CPI was reviewed in 2008. The changes to the list reflect our changing priorities, tastes, lifestyles and incomes, but also what’s on the market and how much it costs.
For example, many of the items added in 2008 reflect advances in technology – or cheaper access to technology — but also factors like environmental sustainability. Out went solid fuel burners and in came heat pumps. Brooms, and bleach don’t figure any more, but automatic dishwashing powder does. Calculators, video tapes, photographic film, DVD/VCR combination players and vehicle seat covers were removed.
It’s not that people don’t buy these things. It’s just that they now form a smaller portion of what households spend money on.
In their place came in-car satellite navigation units, free-to-air digital television receivers, digital-music downloads, and recordable DVD’s.
Other changes had less to do with technology and more to do with our behaviours. We buy more cut flowers and fewer rose bushes, do more ten-pin bowling, and hire more people to mow our lawns, clean our homes, and take our rubbish away. And we buy stuff at auctions, especially online.
The CPI contains 11 categories — food, alcoholic beverages and tobacco, clothing and footwear, housing and household utilities, household contents and services, health, transport, communication, recreation and culture, education, and miscellaneous goods and services.
The actual items priced for the CPI represent spending in each category. Some of the 2008 changes were direct replacements within categories. Computer printer paper replaced writing paper. Brandy made way for vodka. Casserole dishes no longer figure but there’s still glassware, tableware and cookware in the household contents basket. Cathode ray tube television sets are gone because the range is now covered by LCD and plasma display sets.
Statistically speaking, a ’household’ is a group of people who share a private dwelling for more than three nights a week, share food or contribute directly to its cost. This excludes people in homes for the elderly, hostels, prisons and the armed forces, but includes most flatting arrangements.
You’re part of a household if you have some influence on household spending, even if it’s just by grumbling about putting out the rubbish, mowing the lawns or what’s for dinner tonight.