Fri | Sep 22, 2017

Statin wants you to save your receipts. Here’s why

Published:Friday | March 3, 2017 | 3:00 AMNeville Graham
Director General of the Statistical Institute of Jamaica, Carol Coy.
A shopper walks through the isles of a grocery store. The goods and services that Jamaicans regularly buy are tracked by Statin in order to estimate inflation. Every 10 years or so, Statin conducts a Household Expenditure Survey to freshen the list.
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Every decade, field agents deployed by the Statistical Institute of Jamaica, Statin, span out across Jamaica in search of information to hone the data set that is meant to track price movements in the economy.

Under the Household Expenditure Survey (HES), now under way across Jamaica, the agency collects baseline information for the Consumer Price Index (CPI), the metric used to determine the weighted average movement of prices and its effect on the cost of living - in other words, inflation.

Essentially, the HES determines what items are placed in the CPI basket to measure inflation.

"This is a survey that we undertake at intervals. The basis of it is to revise the Consumer Price Index," says Director General of Statin Carol Coy.

"The information gleaned will determine the items that we track and the weighting that we give to each item in calculating the CPI," Coy told the Financial Gleaner.

The last survey was done in 2004-05, so the current HES is behind schedule. Coy says Statin wanted to be in the field in 2015, but lacked the funds to finance the survey. Provisions in the 2015-16 Budget for the groundwork for HES, backed up by assistance from the Inter-American Development Bank (IDB), allowed Statin to get the ball rolling, albeit nearly two years later.

More items added to basket

"In the last years, we had not received enough funding to carry out the survey, but since last financial year, we got enough to assist us in moving forward. The IDB also assisted us in 2016 in doing developmental work," Coy said.

The CPI basket currently contains more than 500 items, according to Coy, who said that after the 2004-05 survey, some 280 items were added.

In tracking the CPI, which estimates headline inflation, planners, government and private-sector decision-makers are effectively tracking items that households consume, said the Statin director. Statin keeps the CPI current by going back to households at decade-long intervals to have them update the agency on items they regularly buy.

Coy says the concern is that the longer the CPI weights remain undisturbed, there is a question of how reflective it is of what is happening in the average household and, by extension, the economy.

"The fact is that tastes have changed and so, for example, smartphones may not have been around the last time we did it [the HES]. People may have different eating habits, with less dairy or non-dairy products being consumed. The toll roads are now a fact of life and therefore an important area of expenditure for those living in Portmore," Coy explained.

"We at Statin want to see the CPI accurately reflecting current expenditure," she said.

The current Household Expenditure Survey will use a sample size of 12,500 households. Coy says the sample will be equally segmented into just over 1,000 for each month of the data-collection period that runs from February 2017 to January 2018.

She said that the subsets are reflective of the total sample.

"Every month, over a 12-month period, we are tracking different households," Coy said, noting that first contact has already been made with the initial set of households.

The data-collection team is comprised of 100 interviewers scattered across Jamaica, and supervised by 20-25 supervisors, who, in turn, are managed regular employees of Statin.

Statin Director of Field Operations Damien Tyrell is in charge of the operation.

Coy says the HES, from start to finish, is estimated to cost about $200 million. The developmental phase included testing of the survey questionnaire and training of field workers. The Jamaican Government allocated $93 million for the project in the 2017-18 Budget, while the rest is covered in the 2018-19 expenditures.

Urged to assist

Coy made a plea both for householders to participate in the survey when field workers come knocking, and that they save the receipts for the goods and services they buy.

She also noted that confidentiality is assured and the data collected will be used only for the stated purpose.

"One of the things we can definitively say is that the information that we use at Statin is used for statistical purposes only. We do not share data that we collect. Whether it be from a household or a business, we do not share this information with any agency or any organisation," the director general said.

Statin field workers will be properly identified and will carry introductory letters that will explain the process of data collection, Coy said.

neville.graham@gleanerjm.com