GLOSSARY
Acquisitions approach
A conceptual approach to constructing the CPI. It measures changes in the prices of goods and services acquired.
All groups index
The index series showing price movement for the weighted combination of all goods and services priced for the CPI. The highest level of CPI aggregation.
Analytical living cost indexes (ALCIs)
A suite of indexes specifically designed to measure changes in living costs across different groups in the community. These subgroups are: Employee households; Other government transfer recipient households; Age pensioner households; and Self-funded retiree households.
Basket
Commonly used term for the goods and services priced for the purpose of compiling the CPI.
Bias
A systematic tendency for the calculated CPI to diverge from some ideal or preferred index, resulting from the method of data collection or processing, or the index formula used. Classification
COICOP
Classification of Individual Consumption According to Purpose - the international standard classification framework for the systematic categorisation of all goods and services acquired by the consumer household sector.
Compilation
The process of deriving price indexes for elementary aggregates.
Cost of living index
An index that Pollack (1983) defined as measuring the change over time in the minimum cost of purchasing a basket of goods and services capable of providing the same utility (or satisfaction) as that provided by the basket purchased in the reference base period.
Cost-of-use approach
A conceptual approach to constructing the CPI. The cost-of-use approach provides the best indication of changes in living standards as it relates to goods and services actually consumed in the base period, irrespective of when they were acquired or paid for.
CPI
Consumer Price Index - a general indicator of the rate of change in prices paid by households for consumer goods and services.
CPI population group
That subset of the Australian population to which the CPI specifically relates, currently metropolitan households.
CPI Series review
The Consumer Price Index (CPI) is subject to periodic reviews. While an important objective of the reviews is to update item weights, formal reviews also provide an opportunity to reassess the scope and coverage of the index and other methodological issues.
Deposit and loan facilities
Services of deposit and loan facilities provided by financial intermediaries. These measures are a significant component of the Financial Services index.
Elementary aggregate
Elementary aggregates represent the lowest level for which indexes are constructed. In concept, they also represent the finest level at which commodity weights can be assigned There are up to 1,000 elementary aggregates for each capital city.
Expenditure class
A grouping of like items in the CPI regimen; this is the level at which CPI weights remain fixed during the life of each CPI series. There are 90 expenditure classes.
Fisher price index
The geometric average of the Laspeyres price index and the Paasche price index. It is a symmetric index and a superlative index.
Fixed weighted index
An index in which the weighting pattern is fixed for the period for which the index is calculated.
Group
The first level of disaggregation of the CPI. There are 11 expenditure groups in the CPI.
Household Expenditure Survey (HES)
A sample survey conducted to determine the expenditure patterns of private households. Data from the HES is used as a primary source of information for the estimation of expenditure weights in the CPI.
Indexation
The periodic adjustment of a money value (e.g. pensions, rents) according to changes in a selected index.
Laspeyres price index
A basket index in which the basket is composed of the actual quantities of goods and services in the earlier of the two periods compared.
Linking
The technique used to join index series which have different weighting patterns to form a continuous series. The technique ensures that the resultant linked index reflects only price variations (i.e. the introduction of new items and weights does not itself affect the level of the index). Also referred to as chaining.
Metropolitan
For purposes of the CPI 'metropolitan' refers to the six State capital cities, Darwin and Canberra.
Outlays approach
A conceptual approach to constructing the CPI. The outlays (or payments) approach defines the basket in terms of the actual amounts paid by households during the base period to gain access to consumer goods and services (without regard to the source of such funds).
Owner-occupied housing (OOH)
Dwellings owned by the households that live in them. The dwellings are fixed assets that their owners use to produce housing services for their own consumption, these services being usually included within the scope of the CPI.
Paasche price index
A basket index in which the basket is composed of the actual quantities of goods and services in the later of the two periods compared.
Pensioner and Beneficiary Living Cost Index (PBLCI)
An index established in August 2009 that specifically reflects changes in the living costs of pensioners and other households receiving income support from the government.
Price index
A composite measure of the prices of items expressed relative to a defined base period.
Price levels
Actual money values at a particular time.
Price movements
Changes in price levels between two or more periods. Movements can be expressed in money values, as price relatives, or as percentage changes.
Price relative
A measure of price movements: the ratio of the price level in one period to the price level in another.
Property income
The income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to, or putting the tangible non-produced asset at the disposal of, another institutional unit.
Pure price change
The change in the price of an item after removing any variation in price attributable to a change in quality or quantity.
Quality adjustment
The elimination of the effect that changes in the attributes (quality) of an item have on the price of an item in order to isolate the pure price change.
Reference base period
The period in which the CPI is given a value of 100.0. The CPI is currently on a reference base of 1989-90.
Rental equivalence
The estimation of the imputed rents payable by owner-occupiers on the basis of the rents payable on the market for accommodation of the same type.
Scanner data
Detailed data on sales of consumer goods obtained by scanning the bar codes for individual products at electronic points of sale in retail outlets. The data can provide detailed information about quantities, characteristics and values of goods sold, as well as their prices.
Spatial price index (SPI)
A spatial price index is one that enables price levels to be compared between geographical regions at the same time.
Subgroup
A collection of related expenditure classes. There are 33 subgroups in the CPI.
Superlative index
A superlative index is one of a small group of indexes that makes equal use of prices and quantities, and treats them in a symmetrical manner in each pair of periods under observation. Examples are the Fisher Index and the Tornqvist Index. Superlative indexes require both price and expenditure values for all periods.
Temporal price index
A temporal index is one that allows for comparison between sets of prices at two times.
User cost
The cost incurred over a period of time by the owner of a fixed asset or consumer durable as a consequence of using it to provide a flow of capital or consumption services. User cost consists mainly of the depreciation of the asset or durable (measured at current prices and not at historic cost) plus the capital, or interest, cost.
Weight
The measure of the relative importance of an item in an index regimen. Weights can be expressed in either quantity or value terms. Value weights are used in the CPI.
Weighting base period
The period to which the fixed expenditure weights relate.
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