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Statistical presentation

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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 shows the development of prices, minus indirect taxes plus subsidies, 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 (minus indirect taxes plus general subsidies) 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 index of net retail prices can best be characterized as a fixed weight index of a Laspeyres-type. The prices that are included in the index of net retail prices are not the prices paid by the consumers, but the purchase prices after deduction of indirect taxes and addition of subsidies (to the extent possible). The only exception to this is rent payments where the total rent, i.e. the share of rent payments, 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 from the Household Budget Survey.

The price indices for April 2020 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. Read more at Subject page (in Danish).

Data description

The index of net retail prices shows the development of prices, minus indirect taxes plus subsidies, 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 (minus indirect taxes plus general subsidies) 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 index of net retail prices can best be characterized as a fixed weight index of a Laspeyres-type. The prices that are included in the index of net retail prices are not the prices paid by the consumers, but the purchase prices after deduction of indirect taxes and addition of subsidies (to the extent possible). The only exception to this is rent payments where the total rent, i.e. the share of rent payments, 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 2020 and are based on private consumption expenditure in 2018. The weights are updated on a yearly basis. Up till December 2000 the index was calculated with the average of November 1974 till January 1975=100. From January 2001 until December 2015 the index was calculated with 2000=100 as the base year. As from January 2016 the index is calculated with 2015=100.

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 index of net retail prices is published monthly.

Legal acts and other agreements

The index of net retail prices is compiled in pursuance of section 8 of the Act on Statistics Denmark and Consolidated Act on calculation of an index of net retail prices.

There are no European Union regulations relating to the index of net retail prices.

Cost and burden

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

Comment

In April 2020, the non-response-rate has been significantly larger than normal due to the difficult circumstances for many businesses due to Covid-19, and in April 2020, the non-response-rate in terms of number of price observations is just under 27 per cent. Included are a number of industries where the non-response-rate is 100 per cent, as the industries have been completely closed down during the April price collection period.

In cases where the non-response-rate is less than 100 per cent for a given product group (an elementary index), the price index trend for the product group has been calculated based on the remaining price observations actually collected. Price indices for these products are therefore more uncertain than usual. This is especially true in clothing and shoes, where about 90 per cent of the normal price observations are missing. For clothing and shoes, the price trend in April is calculated solely on the basis of prices from internet shops.

In cases where a number of industries have been closed down completely and therefore the non-response-rate of price observations is 100 per cent, Statistics Denmark has followed the guidance provided by Eurostat for the EU Harmonized Index of Consumer Prices (HICP), which can be found at HICP guidance

For the elementary aggregate indices that do not normally show significant seasonal fluctuations and where prices are likely to remain unchanged, the prices from March 2020 have continued unchanged. Thus, the elementary aggregate indices in April are unchanged compared to March for, among other things health services, sports, cinemas, theaters, museums, zoo, hairdressers and nursing treatments.

For the elementary aggregate indices where there is a seasonal pattern, the change in the indices has been estimated with the corresponding change from last year. The increase from March 2020 to April 2020 has been set equal to the increase from March 2019 to April 2019. This applies to flights, amusement parks, package holidays and hotels.

Finally, indices for restaurants have been estimated with the price trend on take away, where it has been possible to collect prices.

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