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Experience of compiling an HICP in Norway

Experience of compiling an HICP in Norway. CPI workshop Istanbul, 10- 13 October 2011. Norway. Norway is not an EU-member Norway is fully integrated into the EU statistical system, through the EEA agreement Norway is part of the EEA agreement together with Iceland and Liechtenstein

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Experience of compiling an HICP in Norway

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  1. Experience of compiling an HICP in Norway CPI workshop Istanbul, 10- 13 October 2011

  2. Norway • Norway is not an EU-member • Norway is fully integrated into the EU statistical system, through the EEA agreement • Norway is part of the EEA agreement together with Iceland and Liechtenstein • Norway participate on the HICP working groups meetings in Eurostat • No right to vote, but allowed to make a statement • Norway participate in Task Force groups • Groups that are working with specific areas in the HICP, i.e. expanding the COICOP, sampling, etc.

  3. HICP in Norway • The harmonised CPI (HICP) was introduced in March 1997 • Time series starts in January 1995 • Norway participated in the preparation of the HICP since 1993 • Norway is obliged to follow all the regulations for the HICP

  4. HICP and the national CPI • The scope and the coverage of the HICP is somehow different then the national CPI • HICP: inflation index and domestic approach • Norwegians and foreigners consumption in Norway • National CPI: Cost of living index and resident approach • Norwegians consumption in Norway and abroad • Index reference period is different: • HICP: 2005 • CPI: 1998

  5. HICP and the national CPI, cont. • The price data used in the CPI is used in the HICP as well • HICP is covering around 83 % of the national CPI • The following groups are left out: • Owner-occupied housing – included in 2014? • Games of chance – Eurostat is working out a method • Life insurance – left out by definition • Financial Intermediation Services Indirectly Measured (Fisim) –left out by definition

  6. HICP and the national CPI, cont. • All regulations is input to decide the methods in the CPI • CPI and HICP coincide in methods for almost every area • Exception is OOH: • rental equivalence in the CPI, • net acquisition is part of a pilot study in Eurostat • But scope and coverage do not coincide!

  7. HICP and users • HICP is used to compare price growth between countries • CPI is used to measure the price growth faced by Norwegian households • In practice this means the inflation in Norway • The national CPI is more used due to: • A longer time series • Covers more expenditures • CPI with constant taxes is related to the national CPI • More ”well-known” • Dissemination - press release for HICP is not so focused as the national CPI

  8. HICP in the future • Will (probably) cover OOH – net acquisition • Purchase of dwellings will be a part of the HICP • A national HICP with constant taxes (HICP-CT) will be developed • A regulation for HICP-CT will soon be concluded • The time series become better each year • Will the users in Norway prefer HICP to the national CPI?

  9. HICP in the future, cont. • But what about the domestic approach ? • Is this approach possible when consumers are doing their purchases on the internet from foreign enterprises? • HICP should measure price growth in the Norwegian territory • Is purchase from foreigners enterprises on the internet still consumption expenditure that takes place in the Norwegian territory

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