Collecting data on household expenditure

1. Collecting data on household expenditure Draft Chapter 5 of International Comparison Programme – a Handbook

2. Collecting data on household expenditure Will talk about background because relevant to explain what I stress. Heavily influenced by what went wrong last time. Important not to repeat same errors.

3. Collecting data on household expenditure • Where I come from • Survey taking • Latin America – all countries in South America • CPI in Ecuador • Harmonization of CPI in Southern tip • Regional development in India • Prices division in Stats Canada

4. Collecting data on household expenditure • Organizational subjects • ICP a special project • Awful trouble last round • Canada and Australia decided to terminate it • UN Statistical Commission - give it one more chance • Compromise - an evaluation • Evaluators - sharpest critics of ICP

5. Collecting data on household expenditure • All continents and Economic Commissions • Interested in opponents of initiative • Looked into failures • Why was Latin America late? • Why no official figures for LA? • Why was India adamant against? • In Africa: why virtual collapse?

6. Collecting data on household expenditure • Findings: bad management • Incapacity to use resources efficiently • No one in charge • Underfinanced • Not explicit about objectives • No mutual trust among countries • No understanding of list • Exercise perceived as opaque • Little contact with regional authorities

7. Collecting data on household expenditure • Decision to go regional 20 years old • At time no one questioned it • Countries felt decision honoured in the breach • Few contacts outside World Bank • No usable Handbook • No practical guidance

8. Collecting data on household expenditure • Spoke to users • Cavallo • Secretary of Planning in India • Michael Bruno • Under secretaries of Finance • All said: arcane, obsolete, unreliable • Rather use exchange rates

9. Collecting data on household expenditure • Contacts pitched much too low • Mostly: statistical offices • Most directors unaware • Few interested in outcome • Inept coordination • Starting position : strategic weakness

10. Collecting data on household expenditure • Definitions • Scope is region • Comments also apply to sub-region • National coordinator could be one of two • I/C pricing and household budget survey • I/C National Accounts must be aware • National coordination important • Two institutions

11. Collecting data on household expenditure • Governance discussed • Global management as well • Chapter 4 to 5 - transition from centre to region • Regional coordinator and national counterparts • Transmission and understanding of instructions • Informing of progress • How RC supports national counterparts • How counterparts relate to each other • Where relationship takes place

12. Collecting data on household expenditure • Time objectives clear • No allowance for tardy replies • Value of results will suffer • Respect for timetable profound • Information on progress continuous • Threats to timetable • RC and counterparts - communication tools • Surprises for cause - unacceptable

13. Collecting data on household expenditure • RC should have network of high level contacts including • Influence priorities • Referee in inter institutional conflict • Judge on adequacy of resources to meet ends • Involved in matters of substance • Discretion to adjust procedures • Public relations - exercise consistent with national interests • Does not interest exclusively World Bank

14. Collecting data on household expenditure • There is a Products list • National coordinators round a table • Review of goods and services • Cataloguing of gaps and differences • Differences between selected and CPI Deviation from CPI • Exchange of photographs

15. Collecting data on household expenditure • “Internalization” of IPC • Understanding of objectives • Respect for timetable • Tracking progress to avoid surprises • Creation of a network • Trust • Collective approval • Photography • Joint decisions

16. Collecting data on household expenditure • Cannibalizing CPI • CPI - an infra structure • Trained staff and supervisors • Knowledge-how households spend their money • Familiarity - way goods and services marketed • What is not representative • Where to look for replacements • Indications of sample size • Pricing has time dimension

17. Collecting data on household expenditure • How often should consumer goods be priced? • Every quarter • Price taking by right work force • Dress rehearsal to detect outliers • Outliers • Errors of fact and misjudgement • Imprudent to leave detection to last minute

18. Collecting data on household expenditure • Quarterly pricing - same discipline as CPI • Disappearance -temporary or definitive • Seasonality • Replacements • Outlet replacement • Sample size • Proportional to variability in CPI

19. Collecting data on household expenditure • Relevance and trust • Cut-off date • Whoever does not meet it is out • Discriminatory in favour of large countries • RC to create working web page • Participants aware of each other’s progress • TC and questions and answers

20. Collecting data on household expenditure • Capacity to inspect basic data • Confidentiality • Averaging required • Masking affects trust • Ways round provisions of act • Pricing outside the statistical office • Loss of CPI advantages • But could be used for subset

21. Collecting data on household expenditure • Special privileges to RC • Special privileges to RC’s venue • Special privileges to national coordinators • Averaging - consistent among countries • Averaging - reasonable • Accompanied by supporting information • Number of observations and range

22. Collecting data on household expenditure • Editing in two venues • National editing - editing for average prices • Also quarter to quarter changes • Outliers - batch checking • Price interviewer; product; locality; outlet • Extreme outliers (temporarily 2σ ) • Not in national averages

23. Collecting data on household expenditure • New localities, capital and main city • Inter country editing • Use marked information • Exclude extremes • Refer them for checking • Alarm if extremes increase over time • Visit country

24. Collecting data on household expenditure • Transmission - standard system • Recording - standard layout • Most detailed product coding by type of establishment, national average • Challenged by peers • Evidence by photo • By number of quotations • By description

25. Collecting data on household expenditure • Participants have a working statistical office • Office produces CPI regularly • Staff for CPI collection and compilation • Contacts with retail network • Procedure to deal with missing products • Certified processing system • Not assumed: product replacement procedure • Adjustment for small quality variations • Good knowledge of complex products

26. Collecting data on household expenditure • Participants who fail to meet initial conditions • Require basic capability building pre Handbook • But problem of national coverage • Assume only minority have national coverage • RC will help establish missing facilities • Functioning network when pricing gets started • Materials translated into proper language • Lead time for local adjustments

27. Collecting data on household expenditure • Forms for reporting • Price taker to national coordinator • Change in characteristics (standard) • Plus action recommended • Disappearance • Plus action recommended • Disappearance of outlet • Plus action recommended

28. Collecting data on household expenditure • Addendum • Description of special circumstances • Summary form for RC • After full edit

29. Collecting data on household expenditure • Additional topics • Supplementary weights • Sources enumerated in Chapter 4 • Trade associations • Specialized magazines • Customs declarations • Chambers of Commerce

30. Collecting data on household expenditure Offices requiring basic assistance Will be done through CPI Use of standard instructions Included in field manuals Select respected practitioner Example: BLS