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Home > Information > Tokei Chosa Kekka no Katsuyo Jireishu (Examples of Uses of Statistical Survey Results) > “Tokei Chosa Kekka no Katsuyo Jireishu (Examples of Uses of Statistical Survey Results),” Retail Price Survey & Consumer Price Index

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“Tokei Chosa Kekka no Katsuyo Jireishu (Examples of Uses of Statistical Survey Results),” Retail Price Survey & Consumer Price Index

Retail Price Survey & Consumer Price Index

Data from the Retail Price Survey are used in calculation of the Consumer Price Index (CPI).

Retail Price Survey

ObjectiveThe purpose of the survey is to obtain nation-wide information on retail prices of goods and services and house rents, thereby to provide basic data for the Consumer Price Index (CPI) and other price statistics.

CycleEvery month

Consumer Price Index

ObjectiveThe Consumer Price Index (CPI) is calculated to measure the average price movements of goods and services purchased by households in time series.

CycleEvery month

(1) Use based on relevant laws

  1. National Pension Act (Article 27-2), Employees Pension Insurance Act (Article 43-2), National Public Servants Mutual Aid Association Act (Article 72-3)

Standard to follow in revising the amounts of pension payments

 

  1. Ordinance for Enforcement of the City Planning Act (Article 33-2)

Method for calculating the adjustment rate for payment of compensation

 

  1. Ordinance for Enforcement of the National Land Use Planning Act (Article 10)

Method for calculating the adjustment rate to land prices

 

  1. Cabinet Order to specify the detailed regulations of the Eminent Domain Act (Article 16)

Method for calculating the adjustment rate to compensation for a loss

 

  1. Act on Special Measures Concerning Taxation (Article 89), Order for Enforcement of the Act on Special Measures Concerning Taxation (Article 37-8)

The survey results of gasoline prices are used as an index to determine whether or not to partially suspend application / release such a suspension of the taxation rate of the gasoline tax, in case of a steep rise in gasoline prices

 

* In addition to the above, the Seaman's Insurance Act, Act for Medical Measures for Victims of the Atomic Bomb, Local Public Service Mutual Aid Association Act, and many other laws provide uses of the CPI.

(2) Use in administrative policies

  1. Financial policies

Bank of Japan’s monetary policies

  • Before the Bank of Japan carries out its monetary policies, the Bank uses the CPI in its decision-making. For instance, the Bank adopted the additional monetary easing policy, which allowed for zero interest rate, in October 2010. The Bank will virtually maintain the policy until it judges that price stability is in sight, by which it means “On the basis of a year-on-year rate of change in the CPI (Japan, excluding fresh food), it is in a positive range of 2 % or lower, and the midpoint is around 1 %.”
  1. Social welfare services

Reconsideration of amounts of pensions, etc.

  • It is set in law that the amounts paid from the National Pension system and other public pension systems are to be changed according to fluctuations in prices. In April 2005, the “Macro economy slide” was implemented, which is a system to adjust the amount of benefits in the case where it is difficult to keep the financial equilibrium of pensions throughout the financial equilibrium period. The CPI is the basic data in such reconsideration of the amounts paid.

Reconsideration of minimum wages and medical service fees

  • The CPI is also used as basic data in reconsideration of these.
  1. Utility charges

Regulation to raising the fees

  • A pricing system with price cap regulations (price cap system) was introduced for fees for telephone and other NTT services, since revisions of these fees largely affect the interests of users. This regulation sets reasonable basic fees levels as maximum limits, and does not basically allow any fee to be set higher than the level. Instead, NTT is free to change its fees under the level. When these levels are determined, the rate of change of the CPI is considered.

Retail Price Survey & Consumer Price Index illustration 1

  1. Others

Basic data in determining the national amounts of the Inflation-indexed bond (The Ministerial Ordinance concerning Treatment of Inflation-indexed bond)

Measurement of effect of rice policy

Analyses and forecasts of supply-demand of provisions (cereals, vegetables, fruits, livestock products, etc.)

  • Annual real consumption expenditure per person for each item

Verification of effects of deregulation, and others

 

(3) Use by municipalities

Calculation of prefectural Consumer Price Indices

  • Prefectural governments use the results of the Retail Price Survey conducted in respective prefectures, when they calculate the prefectural Consumer Price Index.

(4) Uses as a deflator for important economic indicators

When we compare economic activities from two different time periods, we need to obtain the actual price movement, removing the nominal price movement caused by inflation or deflation. The actual values are calculated by dividing the nominal values by a price index which represents the price change. Such a price index is called a deflator. The CPI is used as this deflator for other important economic indicators such as the change in household income and expenditure, and wages.

Retail Price Survey & Consumer Price Index illustration 2

(5) Use in international comparisons

Providing price data to the International Comparison Program

  • The International Comparison Program (ICP) is an international project that was launched to make a substantial comparison of the real gross domestic product (GDP) of countries in the world, by calculating the purchasing power parities of different currencies. The ICP project was started by the United Nations Statistics Division in 1969. Japan has been on the project since the start of the third period project (for 1975). To obtain the purchasing power parity, participating countries need to provide data on their national prices in accordance with a list of items and brands of commodities and services throughout the world. The Retail Price Survey provides the ICP with data on prices in Japan.

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