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Denmark’s Consumer Price Index Meets Most Legal Requirements, But Some Areas for Improvement

Copenhagen - Eurostat has released its latest compliance report on Denmark’s Harmonised Index of Consumer Prices (HICP), finding that the index meets most legal requirements. However, there are some areas where Statistics Denmark can improve to enhance the comparability and quality of the data.

Quality Adjustments

One area of concern is the treatment of quality adjustments in the HICP. While Statistics Denmark applies implicit quality adjustment methods for certain products, such as personal computers, it recommends exploring alternative methods to ensure the accuracy of the index.

  • Recommendation: Explore alternative quality adjustment methods for technological products with high replacement rates.

Seasonal Products

The report also highlights the importance of tracking seasonal products, particularly in food and package holidays, which are currently excluded from the scanner data collection process. Including these products could improve the representativeness of the HICP.

  • Recommendation: Develop metrics on the type and frequency of imputations and quality adjustments within the production environment.
  • Recommendation: Investigate the importance of seasonal products in scanner data for food and include them in the HICP if significant.

Index Calculation

Statistics Denmark’s use of a Jevons index and geometric average prices meets legal requirements. However, Eurostat recommends improving the transparency of the calculation process by providing more detailed information on missing prices and imputations.

  • Recommendation: Assess the impact of unit value bias in average prices used for airfares.

Administered Prices

The report notes that Statistics Denmark reviews and updates its list of administered price subclasses annually, which is in line with legal requirements.

Compliance Status

Index calculation: Meets legal requirements Quality adjustments: Meets legal requirements, but with some areas for improvement Seasonal products: Meets legal requirements, but with some areas for improvement Administered prices: Meets legal requirements

Overall, Eurostat assesses that the HICP for Denmark is comparable to that of other EU Member States. However, implementing the necessary changes will further improve the comparability and quality of the data.

Recommendations

  1. Explore alternative quality adjustment methods for technological products with high replacement rates.
  2. Develop metrics on the type and frequency of imputations and quality adjustments within the production environment.
  3. Assess the impact of unit value bias in average prices used for airfares.
  4. Investigate the importance of seasonal products in scanner data for food and include them in the HICP if significant.

By implementing these recommendations, Statistics Denmark can enhance the comparability and quality of the HICP, ensuring that it meets the highest standards of accuracy and transparency.