CPI changes reflect changing tastes and technology

Changes in taste and technology are reflected in the consumer price index which has been updated after Statistics New Zealand’s three yearly review of the goods and services in the CPI basket.

The CPI basket of representative goods and services was reselected to ensure it continues to reflect household spending patterns. As part of the latest review, goods added to the basket include tablet computers, external computer hard drives, e-books, and flatbread. Services added include alarm monitoring and delivery charges. Goods removed from the basket include unflued gas heaters, dictionaries, and envelopes.

The addition of tablets and e-books and removal of dictionaries and envelopes will be related.  An increase in electronic references, reading material and communication will have caused a decrease in the use of real books and snail mail.

Just before the survey ran, the economy emerged from a five-quarter recession. Consequently the 2011 CPI weights were affected by the economic situation at the time. There were decreases in the relative importance of the purchase of new housing, professional services associated with buying and selling houses, furniture, household appliances, and cars. The relative importance of food, rentals for housing, and electricity all increased.

Based on the household survey and other information, Statistics NZ estimates that of every $100 spent by households on goods and services covered by the CPI, $23.55 is spent on housing and household utilities, compared with $22.75 in 2008. This reflects increased spending on rent and higher electricity prices.

Food accounts for $18.79 of every $100 spent, compared with $17.83 in 2008. The increase reflects a 14 percent rise in food prices over the past three years.

Other groups declined in relative importance, including transport (down from $16.18 to $15.12 of every $100 spent), with lower spending on cars contributing to the fall.

The increase in the proportion of expenditure on food reflects a world-wide trend. It is good for the country when we produce so much but difficult for people on lower incomes.

3 Responses to CPI changes reflect changing tastes and technology

  1. gravedodger says:

    Must be old bought envelopes yesterday on way home.

  2. mort says:

    so it has nothing to do with massaging indices contents to pick up a few deflationary components to give a lower overall number?

  3. homepaddock says:

    Are you accusing Stats NZ of fiddling the numbers Mort?

    They do numbers not politics and if you check the website you’ll find out how they do it.

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