Thursday, 27 February 2014

Have your say on the CPI

It's not every day you get your chance to have some direct influence on the production of our national statistics, so don't miss out on putting in your thoughts on the Consumer Price Index (CPI).
Last year Statistics NZ convened an advisory panel on the CPI, which produced a report in July: here's the link to the news release which in turn has links to the report itself and the submissions made to the panel, if you really want to get stuck in.

Now, in case you missed it, Stats is consulting with the public at large on the panel's recommendations: here's Stats' announcement about the consultation including the big questions they are asking for feedback on, and here's the full consultation document which includes details on how to put in your views. They've got to be with Stats by close of play on Friday March 14.

You'll have your own ideas, but for what it's worth here are my takes on the bigger issues.

1. Does New Zealand need a monthly CPI? Yes. It's the norm in the developed world, and in any event a quarter can be a long time in a business cycle for a central bank (and the rest of us) to have to wait for readings on inflation.

2. Which regions should we collect CPI prices from? Fewer - 10 would be fine. There's negligible difference in the measured CPI between having 10 price collection points and 15, but it costs more to have 15.

3. Should we produce price indexes for particular groups of households? I'm ambivalent about this. There are some genuine reasons to (what if the real value of super is being eroded by rocketing health costs?) but it also looks like a Trojan horse for every lobbyist in the country to inflict costs on Stats to no great purpose.

4. Should we produce a seasonally adjusted analytical CPI series? Yes, and adjusted at a groups or lower level rather than adjusting the overall CPI.

5. Should we produce indexes that compare price levels of different regions at a single point in time? Perhaps occasionally, but not as a regular commitment. As I've said before, we're too small a country to be bothering with an expensive infrastructure of regional data.

6. Should the scope of the CPI be extended to include overseas purchases by New Zealand households when travelling abroad? No, but counting domestic purchases made over the Internet (as we do now) makes sense to me. Or in the jargon I'm for a 'domestic' criterion (things bought in NZ) being used for the CPI as opposed to a 'national' one (things bought by NZers).

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