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Counting the cost: UNECE guide enables continued production of price statistics during COVID-19 lockdowns

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The new UNECE Guide on producing CPI under lockdown, published today, helps national statistical offices to produce the Consumer Price index (CPI) under periods of lockdown and other emergencies.  

The Consumer Price Index, or CPI, is a key economic indicator in most countries, giving a statistical indication of how much money people would need to spend to maintain the same level of consumption over time. From month to month it measures the prices of goods and services on which a typical household spends money—such as food, transport, clothing, health care and household items. An increase in these prices, and therefore in the index, is known as inflation.  

Because of the widespread use of the CPI as a measure of inflation and for indexation of wages, pensions and social security transfers, the reliability and timeliness of the indicator is crucial. It is usually published monthly on preannounced dates. 

But as the COVID-19 pandemic took hold in early 2020, the ability of national statistical offices (NSOs) to gather the necessary information to produce the CPI and to comply with release dates was severely hampered. The most common way of gathering the necessary information is to send a field force of sometimes hundreds or even thousands of workers to shops and other outlets to find out the current prices of the goods and services they offer. The lockdowns and restrictions imposed in many countries posed unprecedented challenges, precisely at a time when the world was looking to statistics to help them understand the economic consequences of the crisis. 

The closing of many retail outlets meant that prices could not be collected from these. Price collection from outlets that did remain open was in many cases prevented because price collectors were not allowed to travel, had to maintain social distancing, or because there were restrictions on entering or spending time in shops. Certain branches of the economy closed down entirely or were severely curtailed—commercial air travel, public transport, sports and recreation, cultural activities and personal services such as hairdressing and beauty salons—so it became impossible to gather information on the prices of these products and services. 

Producers of the CPI are used to dealing with missing values, but the abrupt surge in absent or unusable values seen during early lockdowns went far beyond anything seen before. To ensure the compilation of a reliable CPI, NSOs therefore had to explore new data sources and new ways of collecting prices, as well as very rapidly developing new methods to make up for missing price observations and changes in data sources. The lockdown also created challenges for the dissemination and communication of the CPI, as users requested additional information about the impact of lockdowns on the CPI. 

Responding to these urgent needs, UNECE worked with experts from Georgia, Italy, United Kingdom, United States and Eurostat to distil recommendations and emerging best practices for CPI data collection, calculation methods and communication under lockdown conditions.  

They had to grapple with some taxing questions, such as whether eating a meal at home that has been delivered by a restaurant should be treated as comparable with an eat-in meal in a restaurant with table service; whether following an exercise class online should be treated the same as a class in a gym with showers and changing rooms; whether online shopping is sufficiently similar to shopping in a store where customers can ask for assistance and clarification. The expert group also proposed techniques for using alternative data sources such as newspaper advertisements and catalogues, prices listed on outlets’ websites, large-scale ‘scraping’ of data from the internet, and use of checkout scanner data. Many of these issues and new techniques were already under consideration as means of modernizing CPI compilation. The pace with which they were put into action during lockdowns has enabled an acceleration of this modernization, with the potential to bring about long-term changes in how CPIs will be produced from now on.  

The experiences of many countries contributed to the Guide, which was used right away by many, and which can now serve as a basis for responding rapidly to future periods of lockdown or other exceptional circumstances. The lessons learned from countries will, it is hoped, allow more resilient production systems to be developed for the CPI in future. 

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