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ITRSY Lombardia updated at November 2022
23 - PRICES
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Contents
Inflation is measured through the construction of the consumer price index, that measures changes in prices of a 'basket' of goods and services, which is representative of households consumer expenditure in a specific year.
Istat calculates three consumer price indices:
- consumer price index for the whole nation (NIC), based on the entire present population’s consumptions;
- consumer price index for wage and salary earners (FOI), based on consumptions of households whose reference person is an employee;
- harmonised index of consumer prices (HICP), calculated according to the EU regulations in force, which is used for the comparison of inflation between Member States and as a key indicator for the monetary policy of the European Central Bank.
The three indicators have different purposes:
- NIC (consumer price index for the whole nation) is used as measurement of the inflation over the entire economic system. The population is considered as one large household of consumers with consumption habits varying significantly across its members.
- FOI (consumer price index for households wage and salary earners ) refers to the consumption of households of employees. It used, in general, to adapt monetary values (e.g. rent) to inflation.
- HICP (harmonised index of consumer prices) was developer to ensure a measurement of inflation harmonised at the EU level. In fact, it is used to measure the convergence of the Member States’ economies. This index is calculated and published by Istat, which also transmits it to Eurostat.
The three indicators have the same common characteristics: the survey on prices, the calculation method, the territorial basis, the classification of the “basket” (which is made up of 12 expenditure categories).
Besides, NIC (consumer price index for the whole nation) and FOI (consumer price index for households of wage and salary earners) are based on the same basket and refer to final consumption of individuals. However, the weight ascribed to each good or service is different across the two indices, and depends on the importance that the various products have in the consumption of the reference populations (for NIC it is the whole resident population, for FOI the households of wage and salary earners)
HICP (harmonised index of consumer prices) has the same reference population as NIC (consumer price index for the whole nation) but refers only to household final monetary consumption expenditure. HIPC also excludes (in compliance with EU regulations) some categories of products, such as lottery products.
Another difference across the three indices refers to concept of price adopted. NIC (consumer price index for the whole nation) and FOI (consumer price index for households of wage and salary earners) always consider the full price of sale, whereas HICP (harmonised index of consumer prices) refers to the price actually paid by the consumer.
For example, in the case of pharmaceutical products, the price considered in the national indices in the full price of the product, while in the harmonised index the price is represented by the share actually paid by individuals (i.e. excluding the shared paid by national health system). The HICP also takes into account temporary reductions of prices (discounts or sales).
The national indices NIC and FOI are also calculated in the version that excludes tobacco, in compliance with law n. 81 of 1992.
The product classification adopted for the calculation of price indices is based on COICOP (Classification of Individual Consumption by Purpose). he first level of the classification comprises 12 item of expenditure, the second 38 categories, and the third 109 groups of products.
In the classification adopted in Italy the 109 groups breakdown into 204 sub-groups, which represent the maximum level of detail into which homogeneous classed of products can be grouped.
The good and services include in the “basket” for the measurement of prices have obviously different importance in the consumption of the population, and therefore a system of weighting coefficients was developed. The weighting coefficients are defined on the basis of National Accounts data and on the results of the survey on household consumption (which every year covers a sample of 28,000 households).
Since January 2010 the territorial basis for the calculation of the indices comprises 83 municipalities (19 regional capitals and 64 provincial capitals). This means that the coverage of the index, in terms of resident population resident in the provinces whose capitals participate in the survey, is of 86.1%.
The information on the prices of the products in the “basket” is collected on around 41,000 commercial outlets and 8,200 housing units (for the survey on rents). The total number of prices collected every month is around 500,000.
The survey on consumer prices is carried out between day 1 and 21 of the month of reference.
The construction cost index for residential buildings, calculated by Istat, measures the changes over time in the costs of residential construction. The cost refers to the direct costs for the construction of a specific category of building, i.e. a residential building.
The base year of the index is 2005, in compliance with EU regulation 1158/2005 in short-term statistics. In 2005 the methodology of the survey was completely revised, with regard to the weighting criteria, the source of information, the characteristics of a “residential building”, and the classification of the materials.
For the calculation of the index, labour costs are grouped into three broad categories: specialised workers, skilled workers, and general workers. The monthly information is derived from Istat’s survey on wages and salaries, considering as variable of reference the hourly cost of manpower in the construction sector.
The new series with base year 2005 have been calculated starting from January 2005 and, for the entire period 2005-2008 - replace the series published with base year 2000.
For the 2000-2004 period, the time series were re-calculated using linking coefficients specific to each cost category.
The indices are calculated on a monthly basis, in line with the measurement of the prices of the various elements of the cost. Monthly data are published by Istat and are available online at http://con.istat.it.
Data on the value of agricultural land refer to the average value of expropriations of such land, considered free of agricultural or rent contracts.
The values are defined every year in accordance with the type of cultivation and separately for each agrarian region of Lombardy (art. 41 – paragraph 4 – d.P.R. 8 June 2001, n.327 and subsequent amendments) and are published in the Official Bulletin of Regione Lombardia.
The industrial producer price index measures the evolution of output prices for goods manufactured in Italy and sold on the domestic and foreign markets.
More specifically, the goods included in the calculation for the domestic market are those of mining, manufacturing, and gas, electricity and water sectors. Those included in the calculation for the foreign market are the products of the mining and manufacturing activities only. For both markets, excluded from the calculations are the sectors of ship, aircraft and train construction, of manufacture of weapons, and industrial services. Since January 2009 indices are calculated with reference to the base year 2005 using the new Ateco 2007 classification (Italian edition of NACE Rev. 2).
Prices are ex factory for the domestic market and F.O.B. for the foreign one. They exclude VAT and any other taxes payable by the purchaser.
Since February 2009 Istat disseminates a set of monthly indicators on producer prices composed of five variables:
- domestic market
- foreign market euro zone
- : foreign market non-euro zone
- synthesis index for the foreign market (euro zone plus non-euro zone)
- synthesis index for the total (domestic market plus foreign market).
The monthly survey on prices is conducted (both for the domestic and foreign markets) refers to a “basket” of products produced in Italy. For the domestic market, the products in the basket (as well as the enterprises in the sample) are defined on the basis on information derived from statistics on industrial production (PRODCOM); for the foreign markets the basket is defined on the basis of external trade data.
The survey units are industrial enterprises operating in Italy that sell their products, on the domestic market or on foreign markets, at market prices, i.e. at a price that corresponds to a sale actually made.
Data in this section refer to average annual prices of fuels (unleaded petrol, automotive gas oil, LPG) and of heating gas oil. They are derived from the survey on prices published by the Ministry of Economic Development in the framework of energy statistics.
Time series are available.
Data aggiornamento:
November, 2010
