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Comparability

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Prices and Consumption, Economic Statistics
Martin Birger Larsen
+45 3917 3459

mbl@dst.dk

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Net Price Index

The index of net retail prices is related to the European Union harmonized index of consumer prices (HICP).

The European Union harmonized index of consumer prices (HICP) is based on actual consumer prices, whereas the index of net retail prices is based on the purchase prices after deduction of indirect taxes and VAT and addition of subsidies (to the extent possible).

From January 2001, the only difference between the national index of net retail prices and the HICP is apart from the price concept the coverage of goods and services, as owner-occupied dwellings is only recorded in the index of net retail prices and not in the HICP.

The index of net retail prices is also related to the consumer price index. The two indices comprise the same groups of goods and services and are calculated according to the same methodology. Consequently, the only difference between the two indices is the price concept used, as indirect taxes and VAT are subtracted in the index of net retail prices, and the weighting.

Comparability - geographical

The index of net retail prices is related to the European Union harmonized index of consumer prices (HICP).

The European Union harmonized index of consumer prices (HICP) is based on actual consumer prices, whereas the index of net retail prices is based on the purchase prices after deduction of indirect taxes and VAT and addition of subsidies (to the extent possible).

From January 2001, the only difference between the national index of net retail prices and the HICP is apart from the price concept the coverage of goods and services, as owner-occupied dwellings is only recorded in the index of net retail prices and not in the HICP.

Comparability over time

In principle, the statistics are fully comparable over time. When making comparisons over longer periods, however, account should be taken of the fact that due to the changes in the weighting and the continuous updating of the sample, it is not the same basket of goods and services that is compared as the sample is continuously updated to reflect the actual consumption pattern.

Coherence - cross domain

The index of net retail prices is related to the consumer price index. The differences between the two indices are the price concept and the weights. The prices in the index of net retail prices are the consumer prices minus indirect taxes plus general subsidies. The weights in the index of net retail prices are different from the weights in the consumer price index because in the index of net retail prices they are calculated excluding indirect taxes and subsidies. This means that heavily taxed parts of private consumption have a lower weight in the index of net retail prices than in the consumer price index.

Coherence - internal

The data are consistent.