CPI/HICP price collection Validation of prices Twinning project: Development of new statistical methodologies and indicators in selected areas of statistics in line with EU statistical standards“, Activity 4.1 – Harmonized Index of Consumer Prices (HICP) Short term mission in Ukraine: September 2012 Martin Birger Larsen (Denmark), Olga Kosseyova (Slovakia)

I. CPI/HICP price collection Sample sizes: Prices of goods and services are collected in about outlets and business premises. Number of price quotations is about Geographical coverage: 8 regions, 38 price collection areas within which the most of the prices are collected in urban areas map of Slovakia

Outlet selection: Purposive selection of outlets where consumers usually do their shopping. There is 38 monitored regions within which the outlets are selected. The selection is based on the popularity of the outlet (volume of sales), consistency and completeness of the range of products, cooperativeness of price informant, geographical location and type of outlet. As a rule, three to five outlets are selected for each consumer basket item in the different regions, more outlets are selected in Bratislava, the capital city of the SR. Fewer number of outlets for some specific items are selected in those regions where a limited outlet network or set of items is.

Item selection: Purposive sample annually updated. The information from price collectors and other sources (internet, information from suppliers,..) are used by annual updating of consumer basket. The important criterion for representative items selection is the share of expenditure for them on the overall household expenditure. In the year 2012 the number of representative items of the consumer basket is 710 (CPI), 701 (HICP). Selection of products/varieties: purposive; Price collectors select products/varieties according to the item specification, with significant market share, in cooperation with outlets representatives.

Item/product specification: The level of detail of specification depends on the kind of representative items. For some of the items it is very detailed (e.g. drugs- pharmaceutical products), for others specification is rather broad and price collectors themselves choose product and collect prices for it. The price collectors write information related to the collected (registered) price and important for validation of prices using the specially designed software.

Timing of price observation: Prices are collected on a monthly basis, during the first 20 days of a reference month (only in working days). The exception from this rule are the prices of fuels ( in the past SO SR collected price for fuels 3 times per month (1 st, 10 th and 20 th )). At present Statistical Office of Slovak Republic (SO SR) does not collect prices for fuels by itself – SO SR is provided with fuel prices by administrative source (Administration of State Material Reserves) weekly. SO SR publishes these prices wekly at its webpage (only at Slovak version of webpage of SOSR). The prices of fuels refering to the given week form the source for the compilation of average monthly prices of fuels (the fuel prices refering to the given week as well as monthly fuels prices can be found at the following link: Prices for fruit and vegetable are collected according to a special timetable to be covered prices in the first, second and in third week Also the prices for second hand cars are not collected by SO SR – they are obtained on the basis of contract with private firm - every second month.

Price collection methods: Most of the prices through personal visits by the staff of the regional statistical authorities to the outlets (retail sale shops, service business premises, housing co-operatives). The price collectors have to follow “Methodological instructions for price collection, verifying and reporting of data” on consumer prices. Some prices are collected only centrally by staff of central statistical office (mainly tariffs and prices equal for the whole country). Starting with the year 2010 the Internet purchases were included in consumer basket.

Validation of CPI/HICP prices – 3 levels of control Statistical office of Slovak Republic uses 3 level of validation of prices I. The lowest (“district”) level – the control done at the level of 38 price collection regions - the level of editing data by price collectors. The prices collectors – especially in the case of replacement need to record not only the prices of but also other important information related to the price of the given product. II. The middle (“regional”) level – the control done at the level of 8 regions, The prices and other recorded information related to the prices from 38 price collection regions are aggregated at the level of 8 regional center of Slovak Republic III. The “central” level of control and/or validation of prices– detailed level of control – different types of reports. CPI and HICP is compiled at central level for whole Slovak Republic

I. The lowest (“district”) level – the control done at the level of 38 price collection regions - the level of editing data by price collectors. The prices collectors – especially in the case of replacement need to record not only the prices of but also other important information related to the price of the given product. I.The lowest (“district”) level of verification of the prices – the control done at the level of 38 price collection regions

The middle (“regional”) level – the control done at the level of 8 regions. The prices and other recorded information related to the prices from 38 price collection regions are aggregated at the level of 8 regional center of Slovak Republic. The special software was developed also for this level of compilation of indices. The software enables to create various types of reports that makes the control of recordedprices easier. But still there is little time for detailed control – the control at this level mainly concerns the completeness and consistency of the data II. The middle (“regional”) level – the level of control done at 8 regional centers (8 regional offices)

III. In the validation process at central level the indices are compiled and stored in 4 stages: A. Indices compiled directly from edited prices B. Indices compiled after correction of typed mistakes and/or other mistakes C. Indices compiled after Quality Adjustment D. Indices compiled after imputation of the seasonal products that are outside the season,..... III. The “central” level of control and/or validation of prices– detailed level of control – different types of reports.