Checking on the dollars! - STATIN survey to show how Jamaicans are spending their money
The household expenditure survey (HES) now being undertaken by the Statistical Institute of Jamaica (STATIN) could impact the importance given to the items now being used to calculate the country's Consumer Price Index (CPI).
The CPI is the metric used to determine the weighted average movement of prices and its effect on the cost of living (inflation).
Last week, STATIN reported that the CPI for June 2017 increased by 0.7 per cent and represented the highest monthly movement in the inflation rate for the calendar year to date.
This was due mainly to increases in the index for the three heaviest weighted divisions: 'food and non-alcoholic beverages' up by 1.1 per cent, 'transport' 0.4 per cent and 'housing, water, electricity, gas and other fuels' up by 0.4 per cent.
Other notable increases were recorded in 'restaurants and accommodation services' up 0.6 per cent and 'recreation and culture' up 0.4 per cent.
The top three weighted division were determined based on the 2005 HES with food and non-alcoholic beverages assigned a weight of 37.46 per cent, transportation 12.82 per cent; with housing, water, electricity, gas and other fuels assigned a weight of 12.76 per cent.
Communications technology, which is expected to pick up some weight this time around, was giving a weighting of 3.99 per cent of household expenditure in the 2005 survey.
This time around, head of STATIN, Carol Coy, does not expect the weight for each division to change drastically, but financial analyst Ralston Hyman believes otherwise.
"I do not think it will affect the inflation rate because what we are looking at is the trend," said Coy.
"The items that carry the weight in the basket, I think they will still carry that weight. But I don't think overall the trend would shift significantly.
"What you might find is that something like communications might pick up some weight but I don't think it is going to be so large. When you think of a normal household budget the bulk of their expenditure is spent on food and housing, such as rent and mortgage, and we don't expect that it should change that significantly," added Coy.
But Hyman told our news team that with the HES being long overdue, people's taste would have changed and the things on which they spend will change.
He pointed to the charge for using toll roads and mobile communication among the areas where Jamaicans are now spending more of their money.
"So there have been changes in consumer patterns, and that is why the international norm is to do it (HES) every five years and we are currently using 2004," said Hyman.
"If you look at things like transportation, electricity, water and housing you will certainly see shifts there, as the toll rates have gone up and there are more toll roads now in comparison to 2004.
"In terms of mobile communication, that has taken on greater significance now than in 2004, so you are likely to see changes in those things. We expect to see more weight given to things like those, which means that will impact more on the inflation rate," added Hyman.
Changes in spending
But head of Indices and Price Analysis Unit, Administrative Statistics Division at STATIN, Shelly-Ann Chambers, argued that it is not prudent to speak about the changes until the survey is completed and the data assessed.
"There would be some changes in the items clearly based on how spending pattern is in the Jamaican economy, where persons have gotten a little more health-conscious," said Chambers.
"We have seen an increase even in the products being sold that are wheat-based and soy-based and the likes. And there have been advances in technology so things will change in that area.
"But I can't speak definitively to the extent of difference between the basket that we use currently and what the basket will dictate when the household expenditure survey is completed."
The CPI basket currently contains more than 500 items, with 280 items having been added after the last survey.