Information Note on Implications of COVID-19 on the Consumer Price Index - September 2021

September 2021

It was estimated that households, on average, were unable to consume 1.1% of the goods and services in the CPI basket of goods and services in September. These consist of the following items included in the CPI:

• Sports admittance
• Children's activities
• Night Clubs
• Theatres & concerts
• Package holidays
• Rail catering
• Canteens

In addition to this, due to the closure of some outlets, household consumption for many other goods and services was significantly reduced.

Impact on CPI data collection

The CSO sustained the following contingency measures to collect CPI price data for September which were initially implemented in April 2020:

1. Price information was collected from websites and the CSO engaged with large retailers that provided price data to replace the price information which was previously collected in-store by the price collectors. The CSO maximised the price collection from these alternative sources to the greatest extent possible and ensured that the information used for the CPI was comparable between August and September.
2. The CSO engaged with companies and sole traders that normally provide price information in specific sectoral surveys i.e. mainly in services. The CSO appreciates the continued support and assistance of these businesses throughout the COVID-19 pandemic.
3. Price change was imputed for items in the basket where consumption had not recommenced in September or it was not possible to collect reliable price information.

CPI and HICP are fixed weight indices

Price changes for the goods and services in the CPI and HICP are aggregated using weights that reflect household consumption patterns in the previous year. For example, food currently has a weight of almost 12.5% in the CPI basket of goods and services, which means that 12.5% of household consumption expenditure was spent on food. The weights for both the CPI and HICP are updated at the beginning of each year and are held fixed throughout the year. This approach is necessary to ensure that the indices only reflect price changes and not changes in the quantities of products consumed.

Harmonised approach across EU

Given that the aggregation weights must remain fixed, it is necessary to impute the price change for product groups where (i) household consumption has ceased and transactions did not take place in September or (ii) it is not possible to collect prices. To ensure a harmonised approach to imputation across the EU, Eurostat published a guidance note on the compilation of the HICP in the context of the COVID-19 crisis. The Eurostat guidance was prepared in consultation with National Statistical Institutes (NSIs) including the CSO, and the CSO has implemented this guidance for the CPI and HICP.

Imputation for September 2021

In total, 1.1% of the CPI basket required imputation for September because of the COVID-19 pandemic.  Table 1 provides a summary of data collection and imputation for September 2021 by ECOICOP division[1].

The seasonal nature for package holidays was taken into consideration when imputing a price change. The “nearest aggregate estimation” was used for some items, where the price development of a similar available product or service was used to estimate price change.  For other product groups such as theatres, prices were carried forward from August 2021 to estimate prices for September 2021.

Table 1: Summary of CPI data collection and imputation for September 2021 by ECOICOP Division

[1] ECOICOP is the Classification of Individual Consumption by Purpose Adapted to the Needs of Harmonised Indices of Consumer Prices (2000).