Update to measuring the CPI in the September 2021 quarter

Provides an update on the CPI ahead of the September 2021 quarter release.

Released
12/10/2021

Introduction

The Consumer Price Index (CPI) is an inflation indicator measuring the change in the price of a basket of goods and services purchased by households. During the September 2021 quarter, the availability of some goods and services were significantly restricted or unavailable. This article provides an overview of how these goods and services will be treated in the measurement of the CPI in the September 2021 quarter, scheduled for release on 27 October.

Information on the ABS's previous response to COVID-19 in measuring the CPI can be found in Article Archive under 'Response to COVID-19'.

For further information, please email prices.statistics@abs.gov.au.

Unavailable goods and services

During the September 2021 quarter there were prolonged lockdowns in some capital cities and across states and territories. This saw some goods and services become unavailable and significant falls in spending on some other goods and services.

In response to the first wave of COVID-19 in 2020, the ABS developed an imputation framework outlining the treatment for unavailable or significantly restricted goods and services (see Figure 1 in the appendix). This framework will be re-used for the September 2021 quarter in the affected capital cities of Sydney, Melbourne and Canberra.

Where the treatment is to impute from headline CPI, this has the effect of the imputed series not contributing to the CPI quarterly movement. This reflects the fact that there was no, or very little, spending on the particular good or service during the quarter.

September quarter changes

Table 1 lists the affected CPI series during the September quarter, the affected capital cities and the action that will be taken in the measurement of the CPI for the September quarter.

In total, there are ten CPI series that have been affected by lockdowns to a greater or lesser extent in the September quarter. Of these series, three are able to be measured normally using prices collected by the ABS and two are able to be measured using prices collected for closely related series. The movements for four series will be imputed from the relevant capital city's All groups CPI quarterly movement, while Domestic holiday travel will be imputed for all capital cities using the headline CPI movement.

The affected capital cities are predominantly Sydney and Melbourne as lockdowns were in place for all or the majority of the quarter. The lockdown in Canberra was in place for around half the quarter, so collected prices are being used in most cases rather than imputing a movement.

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Table 1: CPI impacted series in the September 2021 quarter
CPI seriesCities affectedActionComment
Food and non-alcoholic beverages group
Restaurant mealsSydney, Melbourne, CanberraCollect takeaway meal prices if available or impute from Takeaway and fast food seriesDuring the lockdowns, dine-in restaurant meals were unavailable. Substitution occurred either directly to purchases of takeaway meals from those restaurants or, where restaurants were closed altogether, to other takeaway food outlets. Where restaurants were open and selling takeaway meals these prices will be used. Where a significant number of restaurants were completely closed, price movements will be imputed from the Takeaway and fast food series.
Alcohol and tobacco group
Alcohol consumed on premisesSydney, Melbourne, CanberraImpute from Takeaway alcoholThis service was not available in these cities for all or most of the quarter. Price movements will be imputed from the Takeaway alcohol series.
Furnishings, household equipment and services group
Child careSydney, Melbourne, CanberraMeasure normally due to centres remaining openChild care centre services continued to be available and used by families during the quarter.
Hairdressing and personal grooming servicesSydney, MelbourneImpute from the relevant capital city's All groups CPIThis service was not available in these cities for all or most of the quarter nor were similar services available. Price movements will be imputed from the relevant capital city's All groups CPI
Transport group
Motor vehiclesSydney, Melbourne, CanberraMeasure normally due to continued tradingMotor vehicle sales continued even with dealerships restricting in-person visits.
Urban transport faresSydney, Melbourne, CanberraImpute from the relevant capital city's All groups CPIWhile urban transport was available, usage fell to extremely low levels during lockdowns. There is no similar series that could be used for imputation. This series will therefore be imputed from the relevant capital city's All group CPI.
Recreation and culture group
Domestic holiday travel and accommodationAll eight capital citiesImpute from capital city's All groups CPIDomestic holiday travel predominantly measures interstate travel. Border closures and lockdowns have significantly disrupted interstate travel. Therefore, this series will be imputed for all capital cities from their All groups CPI.
International holiday travel and accommodationAll eight capital citiesMeasure normally due to low weightThe weight for international travel is 0.08 per cent of the CPI. This weight already reflects the low spending on international travel. Prices for international travel were collected prior to the stopping of travel to New Zealand. This series will be measured normally this quarter.
Sports participationSydney, MelbourneImpute from the relevant capital city's All groups CPIServices such as gyms and organised sport were unavailable in these cities during lockdowns being in place. This series will be imputed from the relevant capital city's All groups CPI.
Other recreational, sporting and cultural servicesSydney, MelbourneImpute from the relevant capital city's All groups CPIThese services were largely unavailable in these cities during their lockdown periods. This series will be imputed from the relevant capital city's All groups CPI

Appendix - imputation framework

    Figure 1: Imputation framework September 2021 quarter application

    Imputation framework September 2021 quarter application

    Figure 1: Imputation framework September 2021 quarter application

    This image outlines the CPI imputation decision framework. It is a flow chart made up of yes or no questions.
    The first question asks: "Is the good or service still available to purchase?" If the answer is Yes, this flows to the next question: "Has expenditure declined significantly?" If the answer is Yes (e.g. urban transport), this flows on to the next question: "Has expenditure been substituted to a similar good or service?" However, if the answer to the decline in expenditure is No, then standard imputation is used.
    Following the Yes line for the decline in expenditure, this flows to the next question "Has expenditure been substituted to a similar good or service?" and joins the No flow line from the first question. If the answer to this question is Yes, then donor imputation is used (e.g. alcohol consumed on premises). If the answer is No (e.g. hairdressing services), the decision is to impute off the headline CPI quarterly movement.