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IP02081 Old consumer price index by 18 commodity groups (1983Q3-2001Q2) - discontinued

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Birita Mortansdóttir
6/1/2001
index
X
12/31/1999
1/1/2000
IP02081_PRIS_GL18_T
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Field for searching for a specific value in the list box. This is examples of values you can search for.Consumer price index , Bread and cereals , Meat ,

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Statistics Faroe Islands. Changes in computation of the price index:
The computations are fundamentally changed: As of 1st. quarter 1993, the price index is a consumer price index - prior to this, the price index excluded duties, taxes etc. Till the end of 1992, the price index commission kept all increases in import and production taxes and in other taxes on goods, imposed after 1.1.1980, out of the computations of the price index. This was done because the law on the price index made clear that changes in these taxes should not lead to changes in wages which at that time to a large extent were indexed by the price index. Therefore, the price index did not reflect consumer prices. After the indexation of wages by the price index has been abandoned, there is no longer any reason to keep duties etc. out of the computations of the price index. In fact, it is not possible to isolate the changes in the taxes on goods because the system of taxes on goods was changed to a value-added system. The old price index therefore could not proceed. As of 1st. quarter 1993 onwards, all duties and taxes are included in the computations of the price index. The price index from 1st. quarter onwards therefore may be said to be a consumer price index. It must be noted, however, that the computations are based on weights from the household survey in 1972. For it to be possible to combine the numbers prior to 1993 with those after 1992, the prices before 4th. Quarter 1992 computed both with all taxes and duties and without the increases in taxes and duties since 1.1.1980. The change in the price index from 4th. quarter 1992 to 1st. quarter 1993 therefore is the change in prices including all taxes and duties, while the change prior to 4th. quarter is the change in prices excluding taxes and duties. The change in prices stemming from the change to a value-added system is apparent from the new price index computations. The price index increased from 122.5 in 4th. quarter 1992 to 129.9 in 1st. quarter 1993 - i.e. an increase of about 6 per cent. The growth was then 1 per cent to 2nd. quarter 1993. It is likely that this increase of 7-8 per cent stems mainly from the change to a value-added system. The growth also accords well with the expectations of Statistics Faroe Islands about the effects of the value-added system on the price index. The biggest increase in prices was on energy, both because of no tax or duty being on electricity before and because the import tax on oil was very low.