Istat publishes the first results of an experimental project to estimate consumer spatial price indices at regional level (Sub National Spatial Price Indices or Regional Purchasing Power Parities).
Sub National Spatial Price Indices (SN-SPIs) measure the differences in the price level of a basket of products across regions within a country at a given point of time. They are therefore an important tool to have a more accurate reading of the inequalities and living household conditions across territories, due to the differences in the purchasing power.
In this first publication, the results relating to the first three Ecoicop (European Classification of Individual Consumption by Purpose) expenditure divisions, referring to the year 2021, are disseminated: 01 Food and non-alcoholic beverages, 02 Alcoholic beverages and tobacco, 03 Clothing and footwear.
SN-SPIs computation needs many detailed data at local level for a group of products that are representative of the consumer behavior in different areas. The basket of products must guarantee the requirements of representativeness and comparability. Representativeness relates to the importance of the product in consumer expenditures in a geographical area. Comparability, on the other hand, is guaranteed by the presence of products with the same or similar characteristics, so that any differences in the price levels are, in no way, attributable to the differences in quality.
The sources used for compiling these new indicators are mainly those of the consumer price survey complemented by surveys carried out for the specific purpose of calculating the regional spatial indices. In summary, the three data sources are:
- Scanner data. A unique identifier (bar code) characterizes each product, therefore the comparability in space is guaranteed. Information on turnover and quantity allows to calculate the unit value (average price) for each bar code and to weigh it, fully guaranteeing the principle of representativeness.
- CPI (Consumer Price Index) data. For some product categories (fresh fish, fruit, and vegetables), the definitions in the traditional CPI data collection are detailed enough to allow the use of these data in compliance with comparability. The products of these categories included in the consumer price basket are widely distributed throughout the country.
- Ad hoc surveys carried out in 21 cities (19 regional and the two autonomous provincial capitals, except for L’Aquila [note], replaced by Pescara) for products not covered by scanner data or with too geeric definitions, which do not guarantee comparability, in the territorial CPI survey. For these products, ad hoc surveys were the only way to ensure comparability and representativeness. Even if the territorial coverage of these surveys does not reach the detailed level of the other sources, it is sufficient to guarantee reliable estimates. The surveys were conducted by the Municipal Statistical Offices of the municipalities involved, on a basket of products selected by Istat considering their share of household expenditure within Ecoicop division and the information on the importance of the single product provided by the municipal coordinator. The surveys are carried out using the CAPI technique (Computer assisted personal interview).
The methodology used to compute SN-SPIs is that recommended by the International Comparison Program (ICP) and used by the World Bank.
[note]: Due to the persistent difficulties in carrying out the CPI survey in the Municipality of L’Aquila, Pescara was preferred as the city in the Abruzzo region where to collect data for the product categories in the ad hoc surveys (Clothing and Footwear and some fresh food products).