How many goods are in the cpi basket

For example, while spending on acoustic guitars and power drills is relatively low, both are included in the baskets to represent wider markets musical instruments and electrical tools respectively that would otherwise not be covered explicitly. Trends in expenditure, as well as the latest available figures, help to inform the decisions in all cases.

This focus on expenditures in determining the contents of the baskets partly reflects the data that are available describing household spending patterns. One major source of information comes from the diaries and questionnaires filled in by people taking part in the Office for National Statistics ONS Living Costs and Food Survey , a continuous survey of around 5, households each year. This is supplemented by detailed analyses of trends presented by market research companies, trade journals and in press reports.

Changes in the retail environment are also reported to the ONS by the price collectors. Together, these various sources of information help to ensure that the goods and services bought by the average household are appropriately represented in the inflation baskets.

It is very important to note that the contents of the baskets and, in particular, changes from one year to the next should not be given significance beyond their purpose as representative items used in estimating consumer price changes.

Changes to the baskets will reflect evolving consumer tastes but only over a long run of years. In any particular year, changes to the baskets will reflect a range of considerations such as practical experience in collecting prices, the desire to improve coverage in high-spending areas, or analysis that suggests that estimated price changes could be improved by varying the number or type of representative items collected.

Indeed, within each product grouping there is usually a point at which the exact number and choice of items and the precise weights attached to them become a matter of relatively fine judgement. At this detailed level, it is unlikely that such choices would have any significant impact on the consumer price indices. For example, a selection of specific household appliances has been chosen to represent spending on small electrical goods, including irons and kettles. However, other representations would clearly be possible and equally valid.

It should also be noted that the vast majority of the around representative items remain unchanged in In total, 16 items have been added to the CPIH basket and 14 items have been removed. Also, a small number of items have been modified in a total of items. The modifications usually relate to the type of shop where items are priced. At the extreme, if price changes for all the possible items that could be selected in a particular group were identical each month, it would be necessary to select only one of the items for inclusion in the basket.

Price changes for this one item would be perfectly representative of price changes for the group as a whole. Changes to the baskets of goods and services this year are being introduced with the February consumer price inflation statistics to be published on 25 March The baskets will be updated again at the same time next year.

New additions to the baskets in and those items removed are set out in Tables 2 and 3 , together with a summary of the motivation for these changes.

As the tables make clear, these motivations are diverse. As in previous years, changes to the baskets in certainly should not be viewed as a simple indicator of those products or services whose popularity has either grown or fallen significantly over the past year. All of the changes made this year affect all of the consumer price indices. A number of new items have been introduced to represent specific markets where consumer spending is significant or growing and existing items in the baskets may not adequately represent price changes for such goods.

For example, gluten-free cereal has been added to reflect increased shelf space and consumer spending on gluten-free foods. In addition to introducing items to represent distinct sectors or markets, some items have been added to diversify the range of products collected for already established groupings, usually where spending is significant.

For example, a re-usable bottle or mug has been introduced highlighting a trend of consumers moving away from single-use bottles and mugs, possibly influenced by membership of fitness clubs and more recently environmental concerns surrounding single-use plastic.

Vegetable crisps have been added to help aid interpretation of data in the crisps area where prices can be volatile because of promotional activity from retailers. The existing car park item represents short-term parking typically used by shoppers or those working in the local area whereas the new item will capture charges incurred over a longer period of time. Analysis of the broad balance of the existing sample of representative items across CPIH highlighted the scope to reduce the number of items in the audio-visual part of the baskets.

This has been achieved by replacing separate DVD player and Blu-ray disc player items by one combined item. The decision to replace the two specific items was based on their low weight in the section but the change has been made principally as part of the rebalancing of the baskets to improve their representation of overall price change and not the spending on or product history of the two items.

This aim of rebalancing the baskets can also apply within specific categories and, this year, crumpets have replaced individual fruit pies in the bread and cereals class. Crumpets are not used as a dessert in the same way as fruit pies and their inclusion improves the balance of bakery products, with desserts still represented by a sponge and individual cakes. In other cases, new items are direct replacements for similar products with the change made for a variety of reasons.

Computer games exhibit one of the most volatile price series in the baskets, which can make interpretation difficult for users. To attempt to address this, the existing shop-bought item is being replaced by three game items defined by platform.

This will result in more price quotes being collected for a wider range of games in total and will split the weight of the existing item. In turn, this should improve the reliability of the overall series and aid interpretation. However, if price movements of all possible items in the group are very similar, it is sufficient to collect prices for only a few. At the extreme, if price changes for all the possible items that could be selected in a particular group were identical each month, it would be necessary to select only one of the items for inclusion in the basket.

Price changes for this one item would be perfectly representative of price changes for the group as a whole. In contrast, if price movements of all the possible items are very different, prices will be needed for many representative items to get a reliable overall estimate of price change for the group.

The significant allocation of items to the food division relative to its index weight, for example, is partly explained by the relatively high variation in observed price changes between the individual goods in this area.

Conversely, a smaller proportion of items relative to index weight is allocated to the restaurants and hotels division, reflecting greater similarity in observed price changes. Instead, it is far more important to ensure that the sampling of prices for these heavily weighted items is as comprehensive as possible.

The analysis also helps to highlight those areas of CPIH that might benefit most from improved coverage, for example, where the current allocation of items is broadly comparable with index weight but variation in price changes appears relatively high, possibly reflecting the diversity of goods and services covered.

As discussed later in this article, this type of analysis has motivated some of the additions to the baskets in Conversely, it also helps to highlight areas where there is scope to remove items from the baskets without any significant loss of precision in the indices. It is important that growth in the overall size of the baskets is limited each year so that production costs and processing times are contained.

Such analysis cannot tell us which items should be priced and so choosing a particular set of items to represent each area remains a matter of judgement. For example, while spending on acoustic guitars and power drills is relatively low, both are included in the baskets to represent wider markets musical instruments and electrical tools respectively that would otherwise not be covered explicitly.

Trends in expenditure, as well as the latest available figures, help to inform the decisions in all cases. This focus on expenditures in determining the contents of the baskets partly reflects the data that are available describing household spending patterns. One major source of information comes from the diaries and questionnaires filled in by people taking part in the Office for National Statistics ONS Living Costs and Food Survey, a continuous survey of around 5, households each year.

This is supplemented by detailed analyses of trends presented by market research companies, trade journals and in press reports. Changes in the retail environment are also reported to the ONS by the price collectors. Together, these various sources of information help to ensure that the goods and services bought by the average household are appropriately represented in the inflation baskets.

It is very important to note that the contents of the baskets and, in particular, changes from one year to the next should not be given significance beyond their purpose as representative items used in estimating consumer price changes. Changes to the baskets will reflect evolving consumer tastes but only over a long run of years. In any particular year, changes to the baskets will reflect a range of considerations such as practical experience in collecting prices, the desire to improve coverage in high spending areas, or analysis that suggests that estimated price changes could be improved by varying the number or type of representative items collected.

Indeed, within each product grouping there is usually a point at which the exact number and choice of items and the precise weights attached to them become a matter of relatively fine judgement. At this detailed level, it is unlikely that such choices would have any significant impact on the consumer price indices. For example, a selection of specific household appliances has been chosen to represent spending on small electrical goods, including irons and kettles.

However, other representations would clearly be possible and equally valid. It should also be noted that the vast majority of the representative items remain unchanged in In total, 17 items have been added to the CPIH basket and 10 items have been removed. Also, a small number of items have been modified in a total of items. The modifications usually relate to the type of shop where items are priced. Changes to the baskets of goods and services this year are being introduced with the February consumer price inflation statistics published on 24 March The baskets will be updated again at the same time next year.

New additions to the baskets in and those items removed are set out in Tables 2 and 3 , together with a summary of the motivation for these changes. As the tables make clear, these motivations are diverse.

As in previous years, changes to the baskets in certainly should not be viewed as a simple indicator of those products or services whose popularity has either grown or fallen significantly over the past year. All of the changes made this year affect all of the consumer price indices.

A number of new items have been introduced to represent specific markets where consumer spending is significant or growing and existing items in the baskets may not adequately represent price changes for such goods. For example, hybrid and electric cars have been added reflecting increased purchases of this type of vehicle and anticipating the longer-term phasing out of petrol and diesel cars.

In November , the government announced that sales of new petrol and diesel cars would end in the UK by They also announced that the longer-term future of the different types of hybrid would be the subject of consultation. The outcome of that consultation could result in further changes to the basket in future years. Hand hygiene gel expands coverage of the personal healthcare area while the loungewear item reflects the continuing move towards more casual clothing.

The introduction of both items has been influenced by the effects of the coronavirus COVID pandemic, with the increased use of portable hand cleansers by people on the move and more people dressing casually when working at home. The addition of hand weights, such as dumbbells, for home exercise has also been influenced by the effects of the coronavirus pandemic. Other items that have become part of everyday life during the pandemic were considered, most notably face masks.

The importance of clothing and footwear also declined in the basket, shrinking from 5. Note 16 In-person shopping for nonessential retail stores, including clothing stores, was suspended for part of the year in large parts of the country and retailers offered bigger discounts online amid lower demand.

As more Canadians continue to work remotely post-pandemic, it is unclear whether consumer expenditures for clothing will recover to pre-pandemic consumption levels. With the basket update, Statistics Canada introduced important changes aimed at improving the quality of the Canadian CPI. The most recent annual national expenditure data, for the weight reference period, were used.

Other data sources were also incorporated such that the basket of goods and services was updated to reflect changing consumer behaviour. As the pandemic subsides, the agency will continue to monitor consumer expenditure patterns during the reopening and recovery period. The next weight adjustment is planned for , to account for post-pandemic spending, and to maintain relevance.

Improvements to the adjusted price index are also underway, with the next publication planned towards the end of Working with price experts, other national statistical organizations and key stakeholders ensures the data and methods used in the calculation of the CPI are aligned with international standards and best practices.

Ongoing access to reliable, granular and timely expenditure information will enable Statistics Canada to pursue the development of other sought-after indicators, such as measures of inflation for different groups, household types and geography.

The agency will continue to explore new potential sources of expenditure information for future basket updates, and to adopt the most appropriate methods in order to keep the CPI relevant for Canadians. Canada owes the success of its statistical system to a long-standing partnership between Statistics Canada, the citizens of Canada, its businesses, governments and other institutions.

Accurate and timely statistical information could not be produced without their continued co-operation and goodwill. Statistics Canada is committed to serving its clients in a prompt, reliable and courteous manner. To this end, the Agency has developed standards of service which its employees observe in serving its clients. All rights reserved. Please contact us and let us know how we can help you.

Release date: July 21, More information PDF version. Start of text box Private and public pension programs, income tax deductions, and some government social payments are adjusted using the CPI. Start of text box Each good or service in the basket is representative of consumer spending patterns, and price movements are assigned a basket share that is proportional to the consumption expenditure for which they account.

It is also an opportunity to review and update the sample of prices collected, review price index estimation methodologies, and update documentation and dissemination products, although these activities are not limited to basket updates The COVID pandemic, which characterized most of , had a significant impact on household spending. Survey of Household Spending System of National Accounts Quality Assurance Target population Measures domestic consumption Measures domestic expenditures made by private Canadian households, institutional households and non-residents within Canada A residential adjustment is required to exclude consumption abroad, consumption outside of the province of residence Table 1 Note 1 and expenditures by foreigners Product classification Follows distinct classification structure Based on Classification of Individual Consumption According to Purpose COICOP A robust product classification concordance was implemented following review by subject matter experts Target Geography Covers 19 regions within Canada, including sub-provincial detail in Quebec, Ontario and British Columbia Covers all 13 provinces and territories in Canada Sub-provincial detail from the SHS was used Revision policy Non-revisable Subject to revision within SNA cycle An assessment was done to eliminate any systematic revision.

Overall data quality can be guaranteed through the rigour embedded in each SNA release. Note 1 Interprovincial consumption is only in scope of the CPI for tuition fees, through a process known as residentialization, because students often attend postsecondary institutions outside their province of residence. Crackers and crisp breads Fermented or pickled vegetables Herbs, spices and seasonings Foil supplies Contact lenses Perfume and cologne Cookies and sweet biscuits Sauces, condiments and dips Plastic supplies Prescription eyeglasses Other eye care goods Hair preparations and other toilet preparations.

Data table for Chart 1 Table summary This table displays the results of Data table for Chart 1 and , calculated using percent units of measure appearing as column headers. The information is grouped by Major components, selected product groups appearing as row headers , Basket reference year, , , , and appearing as column headers. Major components, selected product groups Basket reference year percent Food Weights are expressed as proportions of All-items CPI in the weight reference period dollars.

Basket weights are at basket weight reference year price. ISSN: Report a problem on this page. Is something not working? Is there information outdated? Can't find what you're looking for? Privacy notice. Measures domestic expenditures made by private Canadian households, institutional households and non-residents within Canada. A residential adjustment is required to exclude consumption abroad, consumption outside of the province of residence Table 1 Note 1 and expenditures by foreigners.

A robust product classification concordance was implemented following review by subject matter experts. Covers 19 regions within Canada, including sub-provincial detail in Quebec, Ontario and British Columbia.

Covers all 13 provinces and territories in Canada. The index reference period or index base period is the period in which the index is set to equal Between periods, the basket share for a given good or service may either increase, decrease or remain unchanged. Each potential outcome corresponds with the change in the proportion of overall expenditures increase, decrease or no change between the reference year and the reference year.

It is important to note, however, that expenditure share is a relative measure. Basket weight changes are a function of the expenditure growth within a given category, as well as the growth rate of all other expenditures in scope of the CPI. A basket share that is declining, for instance, indicates that the rate of growth in that category was less than the rate of growth of overall expenditures.

For the following analysis of basket weight changes, the effect of rounding on basket weights should also be taken into consideration. Given that basket weights are rounded and published at the second decimal place, minute changes in expenditure share may not be apparent.

Basket share changes of smaller magnitudes are, however, accounted for in the CPI , as full-precision expenditure weights are used in its calculation. The chart below shows the evolution from Note to of CPI basket weights for Canada by major component. Over the past 25 years, the basket share of the transportation component has increased the most, while the respective basket shares of the food component and the alcoholic beverages, tobacco products and recreational cannabis component posted the largest declines.

A consistently declining trend was observed in the latter since its weight was first published in , with the basket shares for alcoholic beverages and tobacco products both steadily decreasing over time. The basket, however, recorded the first increase in the basket share of the alcoholic beverages, tobacco products and recreational cannabis component as its weight increased from 2.

This increase reflects, in part, the introduction of recreational cannabis to the CPI basket. Shifting basket shares often result from sustained price changes, which require consumers to reallocate their expenditures.

Note At the national level, the basket share of mortgage interest cost has declined with every basket since , reflecting the increasingly low interest rates offered by commercial banks between and In , consumers allocated a smaller share of spending to clothing and footwear, as well as several durable household goods, including furniture, audio equipment and video equipment. These declines in basket share are attributable, in part, to lower prices for these commodities in compared with Shifting basket shares can also result from evolving social and economic factors.

For example, Canadian consumers allocated a larger share of spending to health care goods in than they did in , Note an increase that coincided with the aging of the Canadian population. Note Similarly, the basket share of cigarettes continued to decline in the basket, falling to 0. While the basket share of food purchased from stores declined between and , food purchased from restaurants grew in importance from 4.

This greater emphasis on food consumed outside the home reflects changing lifestyles and increasing preferences for quick meal solutions, as does the growth in basket share of the other food products and non-alcoholic beverages index, which includes prepackaged foods. The operation of passenger vehicles index decreased in basket share from 9.

Canadians allocated a smaller percentage of their budgets to gasoline in , as expenditures grew more slowly between and compared with other commodities. Higher consumer prices for gasoline during the same time period were moderated by reduced growth in gasoline consumption, Note which contributed to a decline in basket share from 3. Other driving-related expenses, including passenger vehicle insurance premiums and passenger vehicle maintenance and repairs, also declined in basket share.

The importance of cellular and Internet services continued to increase in the basket, which is consistent with the increasing popularity of both technologies, particularly among older Canadians.