The household contents and services group had a combined expenditure weight of 5.26 percent in the consumers price index (CPI) at the June 2008 quarter. The sources and methods used to compile the household contents and services group are explained in this article.
Position in the CPI structure
The household contents and services group of the New Zealand Household Expenditure Classification represented 5.26 percent of the CPI at the June 2008 quarter.
| Expenditure weight for household contents and services |
| Group, subgroup, or class |
Level |
June 2008 quarter expenditure weight (percent) |
Examples of items |
| Household contents and services |
Group |
5.26 |
|
| Furniture, furnishings and floor coverings |
Subgroup |
1.94 |
|
| Furniture and furnishings |
Class |
1.42 |
Bedroom suites and mattresses, lounge suites, dining room suites, outdoor furniture, entertainment units, and lamps |
| Carpets and other floor coverings |
Class |
0.51 |
Woollen carpet, synthetic carpet, and vinyl flooring |
| Household textiles |
Subgroup |
0.44 |
Duvet inners, sheets, towels, and curtains |
| Household appliances |
Subgroup |
1.17 |
|
| Major household appliances |
Class |
0.95 |
Refrigerator-freezers, clothes washing machines and dryers, dishwashing machines, ovens (eg ranges, wall ovens, and microwave ovens), heaters and heat pumps, cleaning appliances (eg vacuum cleaners), and sewing machines |
| Small electrical household appliances |
Class |
0.12 |
Toasters, kettles, and single-function cookers |
| Repair and hire of household appliances |
Class |
0.10 |
Washing machine repair |
| Glassware, tableware and household utensils |
Subgroup |
0.30 |
Dinner sets, drinking glasses, saucepans, cutlery, and storage containers |
| Tools and equipment for house and garden |
Subgroup |
0.53 |
|
| Major tools and equipment for the house and garden |
Class |
0.25 |
Motor mowers, power tools, and equipment hire |
| Small tools and accessories for the house and garden |
Class |
0.28 |
Light bulbs, batteries, power boards, garden hoses, and hammers |
| Other household supplies and services |
Subgroup |
0.89 |
|
| Cleaning products and other household supplies |
Class |
0.67 |
Laundry detergent, dishwashing detergent, surface cleaners, fly spray, plastic wrap, dish cloths, and paper towels |
| Other household services |
Class |
0.22 |
Housekeeping services and furniture removal services
|
Expenditure estimation
The primary source of information used to determine the relative importance of the household contents and services group was the 2006/07 Household Economic Survey (HES), which collected detailed information on the spending patterns of about 2,600 households. Expenditure on the household contents and services group includes spending on goods and services that is funded by insurance claims.
Item and sample selection
The household contents and services group contains a wide range of representative goods and services purchased by households. These goods and services were selected for the CPI basket based on expenditure data from the HES; examples are included in the table above. The household contents and services group excludes goods and services used for property maintenance (such as house paint, wallpaper, plumbing hardware, electrical wiring, plumbing services, and lawn mowing services), which are included in the property maintenance subgroup in the housing and household utilities group.
Price collection
The prices of household contents goods are collected by Statistics New Zealand's price collectors through observation. Two of the four household services are collected via postal questionnaire (household cleaning services and furniture removal services) and two are collected directly from service providers' premises (equipment hire and washing machine repair).
Household contents prices are directly observed by price collectors who visit suitable retail outlets in the 15 CPI urban areas: Whangarei, Auckland, Hamilton, Tauranga, Rotorua, Napier-Hastings, New Plymouth, Wanganui, Palmerston North, Wellington, Nelson, Christchurch, Timaru, Dunedin, and Invercargill. While most prices are collected quarterly, prices for non-food grocery items – items within 'cleaning products and other household supplies' and some items within 'small tools and accessories for the house and garden' – are collected monthly, alongside the food price collection in supermarkets.
Household contents prices are collected from about 20 department stores, 40 appliance stores, 30 carpet or floor covering stores, 15 furniture stores, 75 supermarkets, and 30 lighting stores. Prices for two of the household services are collected from 30 appropriate outlets for washing machine repairs and about 30 outlets for chainsaw hire.
The prices of the other household services are collected from a sample of appropriate businesses via postal questionnaires. Housekeeping service prices are collected from about 30 service providers in the five CPI broad regions (Auckland, Wellington, the rest of North Island, Canterbury, and the rest of South Island), while removal service prices are collected from about 15 removal companies throughout the country (with an emphasis on the main urban areas). The postal questionnaires for household service providers ask for prices for 'standard' jobs, such as removing a given number of cubic metres of household items to a new urban location, or a cleaning job for a home of a given size and layout. Specifications for the standard jobs were developed with input from businesses in the relevant industries.
Estimation
For items collected monthly in household contents and services, prices are averaged over the quarter for inclusion in the CPI.
To calculate these averages, monthly regional average prices for each item are obtained by outlet-weighting the prices collected at different outlets within each region. The monthly regional average prices are used to calculate quarterly regional average prices, by weighting each monthly regional average price by the number of days in the month in which it was collected. This is called day-weighting. All the regions are aggregated to obtain the New Zealand quarterly index by weighting together regional price movements from the base (ie June 2008) quarter to the current quarter, using regional population weights.
For other household contents items, and directly collected household services, the elementary aggregate indexes for the 15 regions (calculated as above for the monthly items, except that the day-weighting step is not required) are then combined to calculate New Zealand item-level indexes. These use regional price movements weighted by regional population-weighted shares of the national expenditure weight. Each region is assumed to have the same spending pattern (ie the same goods and services are price-surveyed in each region and they are given the same relative importance within each region). The population of each regional council area (or a proportion of it) is assigned to the most appropriate of the 15 urban areas priced in the CPI.
Average prices for housekeeping services are calculated for five broad regions, while prices for removal services are used to directly calculate a New Zealand item-level index. This is because limited sample sizes do not support robust estimation at the 15-region level.
Quality assurance
The aim of the CPI is to measure the price change of the same product at each sampled outlet or business over time. In practice, sampled products may become unavailable, may change, or may become unrepresentative. When this occurs, there may be a change in quality and an adjustment is made so that only the estimated 'pure' price change is shown in the CPI. For example, a ticket price increase (decrease) that is deemed to be purely the result of better (poorer) quality materials or service should be adjusted for and the price change not shown.
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