A major review of the Consumers Price Index (CPI) was implemented when the September 2006 quarter index was released in October 2006. The review involved reselecting and reweighting the basket of representative goods and services, updating the sample of retail outlets that prices are collected from, and other changes such as the adoption of a new expenditure classification.
Early in the review process, a seven-member CPI Revision Advisory Committee met to undertake an independent review of the practices and methods used to compile the CPI. One of the committee's recommendations was that at each reweighting of the CPI basket, Statistics New Zealand should calculate a 'superlative' index on a retrospective basis to provide information on the effect of upper-level (or item) 'substitution' on the fixed-weight CPI.
An information paper, Consumers Price Index: Retrospective Superlative Index and Impact of Alternative Housing Weights, presents details of a retrospective superlative index calculated between the June 2002 quarter and the June 2006 quarter. The paper also provides details of what the expenditure weights for purchase and construction of new dwellings and for rented dwellings would have been in 2002, had an alternative method been used. The paper shows how analytical time series, constructed using these alternative weights, track between the June 2002 quarter and the June 2006 quarter.