2005-Base

Explanation of the Consumer Price Index

Preface

  The calculation of the Consumer Price Index (CPI) started in August 1946 in Japan. After several revisions, the Statistics Bureau, the Ministry of Internal Affairs and Communications revised the base period and the weight reference period to the calendar year 2005 in August 2006, which is the thirteenth revision.
  This manual explains the method of index calculation and main points of the 2005-base revision of the CPI in detail.
  You can also refer to the "Annual Report on the Consumer Price Index", the "Monthly Report on the Consumer Price Index" and the "2005-Base Linked Consumer Price Index Time Series" if you need the results.

November 2006
Ministry of Internal Affairs and Communications, Statistics Bureau

Contents

I Outline of the 2005-Base Consumer Price Index(PDF:1,762KB)

1 Characteristics of the index ...................................................................................................................................................................................    1

2 Outline of the index ..............................................................................................................................................................................................    1

3 Index series available ............................................................................................................................................................................................    2

4 Publication of consumer price indices .....................................................................................................................................................................    4

[Reference] Treatment of the housing services of owner-occupied houses ....................................................................................................................    5

II Outline of the 2005-Base revision of the Consumer Price Index(PDF:1,762KB)

1 Aim of the revision ...............................................................................................................................................................................................    6

2 Main points of the revision ....................................................................................................................................................................................    6

3 Link between new and old indices ..........................................................................................................................................................................    9

4 Comparison of new and old indices ........................................................................................................................................................................    9

(Appendix) List of the items included, omitted/integrated in the 2005-Base revision ........................................................................................................   11

III Calculation of the Consumer Price Index

Chapter 1 Calculation of the prices in the observation period(PDF:1,762KB)

1 Computation of the prices in the observation period .................................................................................................................................................   13

2 Substitution of the prices in the observation period ...................................................................................................................................................   15

Chapter 2 Linking of the prices in the observation period(PDF:1,762KB)

1 Necessity for linking prices in the observation period ...............................................................................................................................................   16

2 Method of linking prices in the observation period ....................................................................................................................................................   16

Chapter 3 Calculation of the prices in the base period(PDF:1,762KB) ............................................................................................................................   20

Chapter 4 Calculation of the weights(PDF:1,762KB)

1 Scope of the Family Income and Expenditure Survey (FIES) items adopted for the weights .........................................................................................   21

2 Calculation of the weights for the basic classification ...............................................................................................................................................   22

3 Calculation of the weights for the goods and services classification ...........................................................................................................................   25

4 Calculation of the weights for indices by characteristics of households and total households ........................................................................................   26

Chapter 5 Index Calculation(PDF:1,762KB)

1 Index formula .....................................................................................................................................................................................................   27

2 Process of the index calculation ............................................................................................................................................................................   27

3 Process for the case when the prices in the observation period are not available .........................................................................................................   28

4 Computation of average indices for calendar year, fiscal year, and so on ...................................................................................................................   28

5 Computation of the rate of change ........................................................................................................................................................................   29

6 Computation of the contribution to the total change and the rate of contribution .........................................................................................................   30

7 Method of index computation ...............................................................................................................................................................................   30

8 Process of rounding ............................................................................................................................................................................................   35

Chapter 6 Linking of new and old indices(PDF:1,762KB)

1 Method of linking new and old indices  ..................................................................................................................................................................   36

2 Range for calculating linked indices  ......................................................................................................................................................................   37

3 Notice for the use of linked indices .......................................................................................................................................................................   38

Chapter 7 Seasonal adjustment(PDF:1,762KB)

1 Calculation of seasonally adjusted indices ..............................................................................................................................................................   39

2 Original series to be used for the calculation of seasonally adjusted indices ................................................................................................................   39

3 Recalculation of seasonally adjusted indices ...........................................................................................................................................................   39

4 Available series of seasonally adjusted indices ........................................................................................................................................................   39

[Reference] Method of seasonal adjustment .............................................................................................................................................................   40

Appendix 1 Calculation of the price index for PCs and Cameras by Hedonic method(PDF:1,762KB) ...............................................................................   41

Appendix 2 Special calculation of the prices in the observation period and the price indices for some items(PDF:1,762KB) ...............................................   43

Appendix 3 Calculation of the weights for the imputed rent(PDF:17,62KB) ..................................................................................................................   71

Appendix 4 Calculation of the CPI by midpoint-year basket method(PDF:1,762KB) ......................................................................................................   78

IV Related documents for the 2005-Base Consumer Price Index 

1 List of information for items of the 2005-Base Consumer Price Index(PDF:1,762KB) ................................................................................................   81

2 List of municipalities for the price survey(PDF:1,762KB) ........................................................................................................................................   93

3 Aggregation table from the items to the groups (basic classification)(PDF:1,762KB) ..................................................................................................   97

4 Aggregation table from the items to the classes (goods and services classification)(PDF:1,762KB) .............................................................................. 103

5 Division and integration of the FIES items to the CPI items(PDF:1,762KB) ............................................................................................................... 107

6 Table of correspondence of classes and items between the 2005-Base and the 2000-Base indices(PDF:1,762KB) .......................................................... 122

V Weights of the 2005-Base Consumer Price Index

1 The number of items and weights by subgroups (Japan and the Ku-area of Tokyo, per ten thousand)(PDF:1,762KB) .................................................... 132

2 The number of items and weights by goods and services (Japan and the Ku-area of Tokyo, per ten thousand)(PDF:1,762KB) ........................................ 134

3 Weights by subgroups (City groups, Major Metropolitan Areas, District and Cities with Prefectural Governments, per ten thousand)(PDF:1,762KB) ........ 135

4 Monthly weights of fresh food (Japan and the Ku-area of Tokyo, per ten thousand)(PDF:1,762KB) ............................................................................ 141

VI History of the Consumer Price Index(PDF:1,762KB) ............................................................................................................................................ 143

VII Outline of the Retail Price Survey(PDF:1,762KB) ................................................................................................................................................ 152