Volume 1: Consumer Price Indices

Ecuador

Official title

Indice de precios al consumidor - área urbana nacional (Consumer Price Index - National Urban Area).

Scope

The index is computed monthly and covers low- and middle-income group families in urban areas.

Official base

May 1978-April 1979 = 100.

Source of weights

The weights and selected items were derived from a household expenditure survey conducted between July 1975 and June 1976 in 12 towns with more than 10,000 inhabitants. The survey was conducted during 52 weeks among low- and middle-income group families. The weighting pattern was adjusted for price changes between 1976 and 1978-79.

Weights and composition

Major groups Number of items Weights Approximate number of price quotations
Food 18396.02413
Housing:
Rent 1161.01400
Fuel and light 129.647
Furniture, furnishings and household equipment 656.0332
Clothing and footwear 5107.71060
Miscellaneous 8249.71354
Total (a) 391000.06606

Note: (a) These are sub-groups representing between 150 and 170 items according to town.

Household consumption expenditure

Consumption expenditure comprises all disbursements made by the households for buying consumer goods and services. Income in kind and owner-occupied housing are taken into account in income and expenditure. Durable goods bought during the reference period are taken into account. For credit purchases, only the amount paid during the reference period is included in expenditure. Second-hand purchases are excluded. Social security taxes deducted from gross income are considered as consumption expenditure. Payments made during the reference period for insurance of consumer goods and for life insurance are included.

Method of data collection

The prices for certain food items of major consumption are ascertained weekly or fortnightly by direct buying in various markets. The prices of other items and services are obtained by investigators. All prices are those actually paid by the consumer, and include indirect taxes but exclude discount and sale prices, second-hand purchases and import prices. Prices fixed by the authorities are taken into account only when they are actually paid by consumers.

Housing

Rent quotations are obtained from a sample of houses, apartments and rooms. Each month, a sixth of the sample is surveyed. A weighted arithmetic average is used for computing the index. No account is taken of owner-occupied dwellings.

Specification of varieties

The specifications of varieties relate to those items and services of major consumption and describe brand, dimension, weight, unit, etc.

Substitution, quality change, etc.

If an item disappears from the market, it is replaced by another with similar characteristics. If there is a quality change, the item is considered to be a new one and adjustments are made using the linking method.

Seasonal items

The choice of items included in the index has been made so as to ensure continuity of price collection throughout the year; however, if an item is not available on the market in certain months, the price quotation of the previous month is maintained.

Computation

The index is computed according to the Laspeyres formula as a weighted arithmetic average with fixed base, using weights corresponding to the base period.

Indices are calculated separately for each of the 12 towns according to the Laspeyres formula; the regional and national indices are computed using estimated population weights for 1979.

Organisation and publication

Instituto Nacional de Estadística y Censos: Indice de Precios al Consumidor Area Urbana Nacional (Quito).