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Prices and Consumption, Economic Statistics
Martin Sædholm Nielsen
+45 39 17 30 05

mne@dst.dk

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Harmonized Index of Consumer Prices (HICP)

HICP shows the development of prices for goods and services bought by private households in Denmark. Thus, the index also covers foreign households' consumption expenditure in Denmark, but not Danish households' consumption expenditure abroad. The index shows the monthly changes in the costs of buying a fixed basket of goods, the composition of which is made up in accordance with the households' consumption of goods and services.

The price indices for April, May, June, July, August, September, October, November, December 2020 and January, February, March, April, May and June 2021 are more uncertain than usual, as the non-response rate has been significantly larger than normal and some businesses have been shut down due to COVID-19.

Data description

HICP shows the development of prices for goods and services bought by private households in Denmark. Thus, the index also covers foreign households' consumption expenditure in Denmark, but not Danish households' consumption expenditure abroad. The index shows the monthly changes in the costs of buying a fixed basket of goods, the composition of which is made up in accordance with the households' consumption of goods and services.

HICP can best be characterized as a fixed weight index of a Laspeyres-type. The prices, which form part of the HICP, are the prices which the consumers are actually paying, i.e. including VAT and taxes and after deduction of any subsidies. The only exceptions to this are the expenses for rent where the total rent, i.e. the own share of expenses plus any housing benefits, is included.

The weights are calculated on the basis of data from the national accounts on final consumption expenditure of households in Denmark, distributed among 70 commodity groups. For each of these, a further division is made by using the detailed information on consumption expenditure of Danish households from the Household Budget Survey. The weights were last adjusted in connection with calculating the index for January 2022, and are based on estimated private consumption expenditure in 2021. The weights are updated on a yearly basis.

The Harmonized Index of Consumer Prices with Constant Taxes (HICP-CT) is calculated using the exact same prices and weights as used for the HICP. The exact same index formulas and structure of aggregation is used. The only difference is the concept of prices. In the HICP-CT the tax rates are kept constant since December last year in the calculations. In a given month the current tax rates are subtracted from the consumer price and the tax rates from December last year are added instead. The HICP-CT is then calculated using the prices with tax rates kept constant. The HICP-CT has been produced as an experiment in most EU countries since 2006. The index has been estimated backwards till December 2002. The purpose of the HICP-CT is to give an estimate of the price developments given that all tax rates are kept constant. If all tax rates in a given year are unchanged since December last year, HICP and HICP-CT will show exactly the same development. Differences in the development between HICP and HICP-CT therefore give an indication of the influence of changed tax rates on price changes. The HICP-CT is calculated with 2015=100 as index reference period and weights used are the same as used for the HICP. HICP-CT is calculated using the exact same sources as used for the HICP. The only difference is the concept of prices. In the HICP-CT the tax rates are kept constant since December last year in the calculations. Information on the tax rates are coming from the Net Price Index.

Classification system

ECOICOP (European Classification of Individual Consumption According to Purpose) is an European version of the international classification of consumption goods and services, COICOP. ECOICOP is more detailed than COICOP. The description of the ECOICOP Group 12.6.2.1 (Charges by banks) has been changed in the statbank in relation to the official description to emphasize that interest payments and fees relating to the purchase and ownership of owner-occupied housing are not covered in the consumer price index.

Sector coverage

The household sectors purchase of goods and services in Denmark and foreigners purchase of goods and services in Denmark.

Statistical concepts and definitions

Consumer price: The price paid by the consumer, i.e. including VAT and taxes and after deduction of any subsidies.

Price index: Explanations of other concepts regarding index calculations can be found in the publication (in Danish) Index calculations.

Statistical unit

Groups of consumer goods and services. The concrete division of goods and services can be seen in the document "Vægtgrundlag" at the following link: Groups of goods and services.

Statistical population

The population consists of the goods and services, which are included in the consumption expenditure of domestic households and private foreign visitors to Denmark.

Reference area

Denmark.

Time coverage

2000-

Base period

2015=100

Unit of measure

Index values and rates of percentage changes.

Reference period

The prices are collected monthly during the period from 7th to 15th.

Frequency of dissemination

The HICP is published monthly.

Legal acts and other agreements

The collection of prices for the compilation of HICP is authorized by law based on Council Regulation No 2494/95 of 23 October 1995. The compilation of HICP takes place on a parallel with the consumer price index and the net price index, for which prices are collected with authorization by Notice of Act on the calculation of a net price index.

The following Council and Commission Regulations are enacted for the compilation of HICP:

  1. Council Regulation No 2495/95 of 23 October 1995 concerning the general rules and principles for the calculation of HICP.
  2. Commission Regulation No 1749/96 of 9 September 1996 concerning rules for quality adjustments, update of the sample, and calculation formula, among others.
  3. Commission Regulation No 2214/96 of 20 November 1996 concerning the calculation of sub-indices of the HICP.
  4. Commission Regulation No 2454/97 of 10 December 1997 concerning minimum standards for the quality of the weightings employed.
  5. Council Regulation No 1687/98 of 20 July 1998 concerning extension of the coverage of goods and services in HICP and fixing the price and consumer concepts for HICP.
  6. Council Regulation No 1688/98 of 20 July 1998 concerning the geographic and population coverage of the HICP.
  7. Commission Regulation No 2646/98 of 9 December 1998 concerning minimum standards for the treatment of tariffs ("composite prices") in the HICP.
  8. Commission Regulation No 1617/99 of 23 July 1999 concerning minimum standards for the treatment of insurance in the HICP.
  9. Commission Regulation No 1749/99 of 23 July 1999 concerning the calculation of sub-indices of the HICP.
  10. Council Regulation No 2166/1999 of 8 October 1999 concerning minimum standards for the treatment of products in the health, education and social protection sectors in the HICP.
  11. Commission Regulation No 2601/2000 of 17 November 2000 concerning the timing entering purchasing prices into the HICP.
  12. Commission Regulation 2602/2000 of 17 November 2000 concerning minimum standards for the treatment of price reductions in the HICP.
  13. Commission Regulation No 1920/2001 of 28 September 2001 concerning minimum standards for the treatment of service charges proportional to transaction values in the HICP and amening Regulation No 2214/96.
  14. Commission Regulation No 1921/2001 of 28 September 2001 concerning minimum standards for revision of the HICP and amending Regulation No 2602/2000.
  15. Commission Regulation No 1708/2005 of 19 October 2005 laying down detailed rules for the implementation of Council Regulation No 2494/95 as regards the common index reference period for the harmonized index of consumer prices, and amending Regulation No 2214/96.
  16. Council Regulation No 701/2006 of 25 April 2006 laying down detailed rules for the implementation of Regulation No 2494/95 as regards the temporal coverage of price collection in the harmonized index of consumer prices.
  17. Commission Regulation No 1334/2007 of November 2007 amending Regulation No 1749/96 on initial implementing measures for Council Regulation No 2494/95 concerning harmonized indices of consumer prices.
  18. Commission Regulation No 330/2009 of 22 April 2009 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the treatment of seasonal products in the Harmonized Indices of Consumer Prices (HICP)
  19. Commission Regulation No 1114/2010 of 1 December 2010 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the quality of HICP weightings and repealing Commission Regulation (EC) No 2454/97
  20. Commission Regulation No 93/2013 of 1 February 2013 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 concerning harmonized indices of consumer prices, as regards establishing owner-occupied housing price indices
  21. Commission Regulation No 119/2013 of 11 February 2013 amending Regulation (EC) No 2214/96 concerning harmonized indices of consumer prices (HICP): transmission and dissemination of sub-indices of the HICP, as regards establishing harmonized indices of consumer prices at constant tax rates

Cost and burden

The total response burden imposed on the reporting of data for the consumer price index, the index of net retail prices and the European Union's harmonized consumer price index is estimated at 2078 hours or 0.578 mill. Dkr.

Comment

More information is available by contacting Prices and Consumption, Statistics Denmark.