iPods added to inflation-tracking basket of goods

Posted on 21 Mar 2006 at 11:40

Champagne and iPods are being added to the ordinary household shopping basket, and slippers and chocolate biscuits are chucked out. At least, this is the nominal 'basket' of goods used by the Office for National Statistics (ONS) to officially track price changes and measure inflation.

As well as MP3 players, music downloads are also being added into the mix, to present a more meaningful reflection of current consumer spending patterns. The economic sampling tracks a number of more or less typical goods and as retail prices rise, or fall, the changes are recorded.

Other new inclusions in the annual review are flat-panel televisions and digital camcorders, in a move to improve the coverage of technological goods.

In total, 30 new items were added for monitoring and the goods that made way for them include personal CD players, slippers and chocolate-coated biscuits.

Each month the ONS will track 120,000 pricing instances for the 650 nominated goods across numerous locations in the UK. The changes in price for these items will be used to compile the main measures of inflation: the Consumer Prices Index (CPI) and Retail Prices Index (RPI).

You can read more on the thinking behind the new additions to the special basket on the ONS website

Britain, by the way, is the largest consumer of Champagne in the world, but popularity alone is not reason for inclusion in the basket: improved statistical analysis is the key motivator. For example, says the ONS, the decision to drop the price collection of chocolate-coated biscuits doesn't mean they are less popular. 'It simply reflects the fact that price changes for this item are adequately represented by the remaining biscuit and chocolate-coated products that remain within the basket.'

Author: Alun Williams