Information Note on Implications of COVID-19 on the Consumer Price Index - January 2022

Weights updating

The product weights for both the CPI and HICP, which reflect household consumption patterns, are updated annually following a harmonised method across the EU. This procedure is specified in Regulation (EU) 2016/792. The main principle is that the weights used in the current year should be representative of household expenditure in the previous year. Therefore, the weights used in the CPI release for January 2022 have been updated to reflect household expenditure in 2021.

To compare the full set of weights for 2022 with previous years, please see the relevant spreadsheet in the CPI methodology documents.

January 2022

It was estimated that households, on average, were unable to consume 1.2% of the goods and services in the CPI basket of goods and services in January. These consist of the following items included in the CPI:

• Package holidays
• Rail catering
• Canteens
• Nightclubs

In addition to this, due to the closure of some outlets, household consumption for many other goods and services was significantly reduced.

Impact on CPI data collection

The CSO sustained the following contingency measures to collect CPI price data for January 2022 which were initially implemented in April 2020:

1. Price information was collected from websites and the CSO engaged with large retailers that provided price data to replace the price information which was previously collected in-store by the price collectors. The CSO maximised the price collection from these alternative sources to the greatest extent possible and ensured that the information used for the CPI was comparable between December and January.
2. The CSO engaged with companies and sole traders that normally provide price information in specific sectoral surveys i.e. mainly in services. The CSO appreciates the continued support and assistance of these businesses throughout the COVID-19 pandemic.
3. Price change was imputed for items in the basket where consumption had not recommenced in January or it was not possible to collect reliable price information.

CPI and HICP are fixed weight indices

Price changes for the goods and services in the CPI and HICP are aggregated using weights that reflect household consumption patterns in the previous year. For example, food currently has a weight of almost 10.2% in the CPI basket of goods and services, which means that 10.2% of household consumption expenditure was spent on food. The weights for both the CPI and HICP are updated at the beginning of each year and are held fixed throughout the year. This approach is necessary to ensure that the indices only reflect price changes and not changes in the quantities of products consumed.

Harmonised approach across EU

Given that the aggregation weights must remain fixed, it is necessary to impute the price change for product groups where (i) household consumption has ceased and transactions did not take place in January or (ii) it is not possible to collect prices. To ensure a harmonised approach to imputation across the EU, Eurostat published a guidance note on the compilation of the HICP in the context of the COVID-19 crisis. The Eurostat guidance was prepared in consultation with National Statistical Institutes (NSIs) including the CSO, and the CSO has implemented this guidance for the CPI and HICP.

Imputation for January 2022

In total, 1.2% of the CPI basket required imputation for January because of the COVID-19 pandemic. Table 1 provides a summary of data collection and imputation for January 2022 by ECOICOP division[1].

The seasonal nature for package holidays was taken into consideration when imputing a price change. The “nearest aggregate estimation” was used for some items, where the price development of a similar available product or service was used to estimate price change. 

Table 1: Summary of CPI data collection and imputation for January 2022 by ECOICOP Division

[1] ECOICOP is the Classification of Individual Consumption by Purpose Adapted to the Needs of Harmonised Indices of Consumer Prices (2000).