Harmonised indices of consumer prices (HICPs) give comparable measures of inflation for the countries and country groups they are produced. They are economic indicators that measure the change over time of the prices of consumer goods and services acquired by households. In other words they are a set of consumer price indices (CPIs) calculated according to a harmonised approach and a single set of definitions.

COICOP/HICP (Classification of Individual Consumption by Purpose adapted to the needs of Harmonised Indices of Consumer Prices).

HICP covers the whole household sector, more precisely the goods and services that are acquired by households.

The published data are as:

Monthly data:

• Indices (HICP 2005=100)
• Annual rates of change
• Monthly rates of change

 Annual data:

• Average index and rate of change
• Weights by COICOP divisions

Each published index or rate of change refers to the 'final monetary consumption expenditure' of the whole household sector of the country.

The target statistical universe is the 'household final monetary consumption expenditure' (HFMCE) within the country. The household sector to which the definition refers includes all individuals or groups of individuals irrespective of, in particular, the type of area in which they live, their position in the income distribution and their nationality or residence status. These definitions follow the national accounts concepts in the European System of Accounts (ESA 1995).

HICP comprise all purchases by households within the territory of the country; those by both resident and non-resident households (i.e. 'domestic concept'). HICP cover the prices paid for goods and services in monetary transactions.

The prices measured are those actually faced by consumers. The HICP exclude interest and credit charges, regarding them as financing costs rather than consumption expenditure.

Italy (San Marino and the Vatican State are not covered).

In 2012, prices are collected from 84 municipalities (out of a total of 110): 20 regional capitals and 64 provincial capitals. Price collection is not carried out in villages or rural areas. In terms of resident population, the rate of coverage is equal to 86.3%.

HICP has been published since 1997.

HICP is produced and published with reference period 2005=100 starting from January 2001.

A set of monthly HICP series for the period 2002-2005 using 2001 as reference year and a set of monthly HICP series for the period 1997-2001, using 1996 as reference year, are also available at request.

Following units are used:

• Index (actually unitless, i.e. it is the ratio of the price of the basket in a given year to the price in the base year multiplied by 100. However, the HICP can be thought of as the amount the average consumer would have to spend in a given year to buy the same basic goods and services that one would have to pay 100 monetary units for in the base period);
• Percentage change on the same period of the previous year (rates);
• Percentage change on the previous period (rates);
• Percentage share of the total (weights).

Month.

Harmonised Indices of Consumer Prices (HICPs) are harmonised inflation figures required under the Treaty on the Functioning of the European Union. Council Regulation (EC) No 2494/95 of 23 October 1995 (OJ L 257/1) sets the legal basis for establishing a harmonised methodology for the compilation of the HICP. Under this Regulation, the Commission has brought forward detailed Regulations establishing the specific rules governing the production of harmonised index. All relevant regulations and methodological details can be found in the HICP section on Eurostat's website under Methodology => Legislation.

All statistics produced and published by the Italian National Institute of Statistics (Istat) are subjected to:

• the Legislative Decree No 322/1989, which is consistent with the UN Fundamental Principles of Official Statistics and places Istat at the centre of the National Statistical System (Sistan). Sistan covers the statistical offices of all levels of government and the chambers of commerce, industry, crafts industries, agriculture;
  
  
• the Decree of the President of the Council of Ministers (DPCM) which every year approves the National Statistical Programme.

The Italian Laws No 222/1927 and No 621/1975 specify the responsibilities and tasks of the agencies that contribute to the production of the Consumer price indices, i.e. Istat and  Municipal Offices of Statistics (MOS).

None.

Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

Istat is obliged by law to respect the principle of statistical confidentiality (Article 9 of Legislative Decree No 322/89) upon which the National Statistical System is founded with regard to data collected during its own surveys. These data, therefore, are used exclusively for statistical purposes and may not be divulged to any party ¿ public or private ¿ outside the National Statistical System, or otherwise published or divulged, except in aggregate form and in such a way that it is impossible to identify the person to whom the data apply.

The compliance with the statistical confidentiality parties an aspect  of the broader principle of personal data protection as provided for by the Ethical code of conduct concerning the protection of personal data (Legislative Decree No 196/03) and specifically Annex A3, 'Ethical code for the processing of personal data for statistical purposes within Sistan'.

In order to make statistical confidentiality and protection of personal data effective, Istat is currently taking appropriate organisational, logistical, methodological and statistical measures in accordance with internationally established standards.

The release calendar is publically available and published at the end of the year for the full following year.

Istat website: Release calendar 2012.

In line with the Legislative Decree No 322/1989 (Article 15, paragraph 1[g] ¿ requirement to publish and disseminate data) and the Italian Statistics Code of Practice (issued by the Comstat - Policy-making and Co-ordinating Committee for Statistical information - under Directive no. 10/2010 in full accordance with the European Statistics Code of Practice), Istat disseminates statistics, mainly on Istat¿s website, (see item 10 - `Dissemination format¿) respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably.

The detailed arrangements are governed by the Carta dei servizi esterni della Diffusione (Charter of Dissemination Services).

Harmonised consumer price indices are produced monthly.

Press releases on-line.

The HICPs for the 12 COICOP Divisions and the total are published in  HICP data and time series tables attached to Press release.

Italian HICP indices, with a level of detail of the COICOP-HICP product classes and  Italian HICP-CT indices, with a level of detail of division, are published in I.Stat, the warehouse of statistics produced by Istat, inside the theme Prices.

None.

See also Istat¿s CPIs section website.

Methodological notes on the Italian HICP and national CPIs are published in:

• Information note 2012 Consumer Price Indices ¿ Basket and weight structure updating, February 2012 
  
  
• HICP 2012: Basket of goods and services, February 2012
  
  
• CPI: general aspects and survey methodology, December 2011 (only in Italian)

See Eurostat's Compliance Monitoring Report of 2007.

Statistical practice used to compile HICP is compliant with HICP methodological requirements and good practices in the field of CPIs Data production process and data quality are regularly carried out both by Istat and Municipal Offices of Statistics (MOS) that are officially in charge of data collection.

Monitoring activity is carried out using different indicators regarding outlet selection, price collection schedule and quality of collected data (temporary non-collection rate by different reasons ¿ outlet closing,  missing items etc; replacement item rate, temporary price reduction rate).

At first stage, data quality are monitored by MOS. At a second stage, Istat carries out a complete check on the entire data-set collected both by MOS and at central level  (more than 591,000 prices are monthly collected).

Istat regularly provides data collectors with training interventions geared towards acquiring appropriate skills for carrying out collection activity.

The quality of the HICP can be assessed high. Its concepts and methodology has been developed according harmonised standards. HICP accuracy is considerably improved following changes introduced in the data collection and data editing processes. The main users consider HICP sufficiently accurate for their purposes. It is disseminated following a pre-announced timetable.

Further work is ongoing to improve the quality. Priorities are quality adjustment methods, treatment of owner-occupied housing (currently excluded) and dissemination and accessibility of documentation (in particular, more detailed data dissemination).

The HICP is mainly used for measuring price trends, economic forecasting and analysis, accounting purpose and deflating series and inflation targeting.

The main users include European Central Bank, European Commission, Bank of Italy, Finance and Economy Ministry, Economic Development Ministry, universities, public and private research institutes, trade associations, National Accounts Division and other Istat sections; media and public at large.

No information.

All COICOP indices at 4-digit level are produced.

The accuracy of HICP can be assessed high. The accuracy of data source is monitored by assessing the methodological soundness of price and  weight sources and the adherence to the harmonised methodology. Price collection assure good coverage and timeliness. Outlets, where price are collected, are selected to represent the Italian trade and services network. All the private household in the economic territory are covered.

The HICP sampling error is not quantified cause a non-probability sampling is used. Sampling errors are reduced using a large amount of consumer prices; furthermore, in order to minimize the variance of the all-items index, a representative number of prices for each item category is collected. 

The HICP non-sampling errors are not quantified. They are considerably reduced in the last years with the in-depth reengineering of the whole Consumer Price survey IT environment. The new IT architecture is based on:

• a centralized relational database that stores all the survey data;
  
  
• a new data collection application, running on ultramobile PCs;
  
  
• a new control and correction application which allows to perform checks and editing on micro data directly on the database and makes available several sets of indicators to monitor data quality.

The Flash estimate of Italian HICP is usually published on the last working day of the reference month.

The final data are published monthly according to the pre-announced Release calendar ¿ in general between 14 and 16 days after the end of the reference month.

The Italian HICP has always been published on the pre-announced release dates.

There are no problems of comparability at geographical level.

HICP is available with reference period 2005=100 starting from January 2001.

Improvements in methodology and introduction of new standards and change in the reference base period have introduced breaks in time series. No back calculations were performed for the period before the year 2001.

ISTAT produces three different Consumer price indices, based on the same survey:

• Consumer price index for the whole nation (NIC Index);
• Harmonised index of consumer prices (HICP Index);
• Consumer price index for blue- and white-collar worker households (FOI Index).

Differences between the HICP and the national CPIs:

• national CPIs refer to household final consumption. So, for Health and Education and some Social protection expenditure, they use gross prices (i.e. the total prices of products, whether fully or partially paid by households), whereas the HICP uses net prices (prices actually paid by households);
• national CPIs do not take into account temporary price reductions (i.e. sales);
• national CPIs include in their scope Games of chance.

HICP is internally coherent. Higher level aggregations are derived from detailed indices according to well-defined procedures.

Not available.

HICP series, including back data, are revisable under the terms set in Commission Regulation (EC) No 1921/2001 of 28 September 2001. The published HICP data may be revised for mistakes, new or improved information, and changes in the system of harmonised rules.

The first data dissemination concerns provisional data for the latest month. These are confirmed or revised to the final figures within the second week of the following month.

Other major revisions are generally released with explanatory notes in the press release. Methodological changes are explained with the first release of data affected by such changes.  

Prices are monthly collected through two distinct surveys carried out at central and territorial level:

• the survey carried out directly by Istat concerns prices of products that do show no variability along national territory or are administered at national level (i.e. tobacco, magazine and other periodicals), that are technically too complex to be collected at territorial level cause quality adjustment issues (i.e. mobile phones, computers) or whom consumption is not strictly linked to the territorial areas (tourist services, some transport services). In terms of weights, survey at central level covers the 22.8% of the 2012 HICP basket (80 000 prices per month);
•  the survey at territorial level is carried in 84 municipalities (out of a total of 110) by MOS (511 000 prices per month, including 8 300 rents).

No of price observations per month: about 591 000

Sample size

Prices are collected in 42 000 outlets (including small retail businesses, large-scale retailers and local markets). Outlets are selected for the survey on a non-probability basis. The selection is carried out directly by MOS according rules established by Istat. It takes into account of:

-     relative weight of products in the basket;

-     variability of prices;

-     availability of  products included in the basket;

-     territory and demographic size of the municipality;

-     type and distribution of outlets on municipal territory;

-     turnover shares of large, small scale and traditional distribution;

-     popularity with consumers.

The list of outlets is updated once a year, usually in December.

Dwelling selection for rental survey is carried out directly by MOS taking into account of dwelling size, location, and ownership type (private or public).

Number of representative items at the lowest classification level

The representative items at lowest classification level whose prices are monthly collected are:

All-items 602

01 Food and non-alcoholic beverages 179

02 Alcoholic beverages, tobacco 13

03 Clothing and footwear 57

04 Housing, water, electricity, gas and other fuels 20

05 Furnishings, household equipment and routine maintenance of the house: 75

06 Health 34

07 Transport 46

08 Communications 10

09 Recreation and culture 74

10 Education 6

11 Restaurants and hotels 24

12 Miscellaneous goods and services 64

Many representative items shown singly cover large areas and use sub samples (i.e. mobile phone services are one item but use a sample of about one hundred tariff plans). In the first stage, item selection is carried out by Istat using several sources: National Accounts and Household Budget Survey data; several outside sources and information from MOS. In the second stage, the product-offers selection is made by price collectors in the field, in accordance with the 'the most sold' principle. Price collection covers both tightly and loosely specified products. Loose specifications are used if the prices within a product group are considered sufficiently homogenous. The product specification for representative items is defined for one year.

Price collection takes place once a month for the majority of products between the 1st and the 21st of the reference month.

For products which show sharp and irregular price changes within the same month, prices are collected twice a month at the same outlet. This rules applies in particular for energy products (collection on the 1st and the 15th of the reference month),  fresh food, such as fish, fruit and vegetables (collection on the 1st and the 12th of the reference month) and for some transport services.

For seasonal products, price collection takes place according a monthly schedule defined at national level that establishes when the product should be considered in-season or out-of-season.

Price collection is completely computerised, i.e. conducted entirely using ultra-mobile PCs (UMPCs) or Tablet PCs with UMTS cards, which are distributed to all data collectors of MOS involved in the survey. Data collectors load data directly, every day just after collected, into the centralized database. They perform checks and editing on micro data directly on the database, with no confusing data redundancy. A continuous, on-line, real-time system for monitoring price collection activities and the quality of the data collected has been implemented.

Data validation is carried out in two stages. First, data are validated at territorial level by MOS. Second, Istat carries out validation data analyzing different indicators available such as temporary non-collection rate, replacement item rate, temporary price reduction rate and price change rate for outlier or error detection.

For some group of goods and services, such as energy, outside sources are used to validate data.

As required by law, in every municipality the data, before to be published, are examined and validated by Municipal Commissions constituted by experts of economical bodies (Trade Unions, Trade Associations etc.).

Weights

The weighting coefficients for the main aggregates are determined on the basis of the values of household final monetary consumption expenditure as derived from National Accounts. Additional information used to define weights for the elementary headings has derived from the Household Budget Survey, from other Istat survey (foreign trade, industrial production and tourist flow) and from external sources. There are 602 item weights at national level. The weights are updated every year. The reference period for current weights is the year 2010, price-updated to December 2011.

Computation of the lowest-level indices

Geometric means are used for computing the elementary price indices in each municipality.

Treatment of missing items and replacements

Generally, if no price is collected due to the non-availability of an item or for any other reason, and where the previously observed price appears to be an appropriate estimate, Istat carries forward the price normally only for 2 months. Replacement prices are used within the third month.

For most of the centrally collected prices, however, where data are missing, statistical methods are used to make an imputation of the price change. Usually, in case of missing observations, the procedure used for estimating consists of applying the month to month rate change of observed prices in their particular stratum.


Introduction of newly significant goods and services

Since the implementation of the HICP, new goods and services have been continuously identified, reported to the Municipal Commission and usually included within 12 months following their identification. Newly significant goods and services are usually identified using information provide by the MOS and a variety of Istat sources and ad-hoc sources.

In principle, the introduction of new items is carried out on the occasion of the annual re-basement of the HICP.

Treatment of price reductions

From the year 2001, the HICP has taken into account temporary price reductions (i.e. sales).

Treatment of seasonal items

From 2011, harmonised minimum standards have been applied in compliance with the Commission Regulation no 330/2009 on the treatment of seasonal products. New standards are applied for the following COICOP aggregations: 01.1.6 Fruit, 01.1.7 Vegetables, 03.1 Clothing and 03.2 Footwear.

As required, for non-available prices in out-of-season months, counter-seasonal estimation is adopted; only if information for this estimation method are not available all-seasonal estimation is used.

During 2011, the impact on the inflation rate was monthly estimated and released in an information note published in conjunction with press release (final data).

Adjustment for quality differences

In order to deal with quality changes, a case-by-case approach is adopted.

Quality adjustment methods adopted are: direct comparison, overlap, bridge overlap and combination of bridge overlap and class mean imputation. Where possible, explicit quality change estimates are made.

N.A.