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Why statistics from state authorities on price growth raises eyebrows? How do they calculate this?

Author : Olexiy Doroshenko

Source : 112 Ukraine

The association of retail chain suppliers has compared data from the State Statistics Service and the Ministry of Economic Development and has calculated the price of a meat basket as of late February.
17:24, 26 March 2018

112 Agency

We have decided to extend the list of goods that make up a meat basket, adding all kinds of meat and sausage goods that are subject to state monitoring. It consists of pork, beef, dressed chicken, chicken fillet, cured pork fat and cured sausage. Apart from that, we have added protein-containing goods such as fish and eggs, because Ukrainians in many cases have to make such a substitution.

Since the beginning of the year, the price of beef has gone up by 5.3%, that of cured pork fat has increased by 4.2%, fish – by 2.6%, eggs – by 1.8%, cured sausage – by 1.6%, chicken fillet – by 0.4%. At the same time, pork has become 1.5% more expensive, while the price of dressed chicken has climbed 0.4%.

However, the inflationary barometer developed by the Ministry of Economic Development and BRDO, indicates a 12% increase in the price of beef, a 16% rise in the price of sausage, a 2% growth in the price of eggs, a 6% drop in the price of pork, a 2% fall in the price of cured pork fat, and a 0.5% decrease in the price of chicken fillet. Therefore, we see inconsistency regarding the price of certain goods, for example, cured pork fat. Moreover, the data on the growth of prices of sausage goods are 10 times apart.

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The thing is that the Better Regulation Delivery Office collects data from open sources, meaning online from chains’ websites and produces a weighted average without making any amendments. It is difficult to understand what is going on with the official statistics. The Better Regulation Delivery Office is an independent non-government body established according to the initiative of the Ministry of Economic Development and Trade and of the Western partners in order to contribute to the creation of efficient regulation in Ukraine. Among the drawback of the BRDO calculations is the fact that the statistics they operate are collected from just four retail chains that operate hypermarkets. However, the fluctuations in retail prices may differ a lot not only from chain to chain but also from region to region. The price may differ, but the price dynamics are largely similar.

Let us now compare the price growth and its decline according to the State Statistics Service and the BRDO statistics by kilogram and decile. According to the official statistics, the price of beef increased by UAH 6.1, whereas it grew by UAH 13.5, according to the European agency. The Service claims that cured pork fat became UAH 2.9 more expensive, whereas the BRDO says it became UAH 2.2 cheaper. The State Statistics Service says the price of cured sausage climbed UAH 1.3, while the BRDO says it rose by UAH 22.6. The price of eggs added UAH 0.5, according to the State Statistics Service, and UAH 0.6, according to the Better Regulation Delivery Office. The state statistics suggest that pork became UAH 1.6 cheaper, the Better Regulation Delivery Office believes its price dropped by UAH 6. The state authority says chicken fillet became UAH 0.4 more expensive, but the BRDO says its price, in fact, declined by the same amount.  

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As of the end of February, according to the State Statistics Service a kilogram of beef cost UAH 120.4 ($4.6) on average, a kilo of pork cost UAH 107.9 ($4.12), a kilo of chicken fillet cost UAH 89.9 ($3.43), a kilo of cured sausage cost UAH 83.8 ($3.2), a kilo of cured pork fat cost UAH 71.7 ($2.74), a kilo of fish cost UAH 67.6 ($2.58), a kilo of dressed chicken cost UAH 53.7 ($2.05), 10 eggs cost UAH 27.5 ($1.05). If an updated meat basket is to be evaluated, it cost UAH 622.5 ($23.76) at the end of February, whereas by the beginning of 2018 it stood at UAH 611.4 ($23.34). This means that the price of the basket rose by UAH 11 within two months.  

In Kyiv, the price of the same basket stands at UAH 683.3 ($26), which means it is UAH 60.8 ($2.32) above the national average. By the way, as of the beginning of the year, its price in the nation’s capital was at UAH 672.7 ($25.68). It became UAH 10.6 more expensive within two months. We are not able to consider the price of the meat basket according to data from hypermarkets because the Better Regulation Delivery Office does not gather information on dressed chicken and fish.

The State Statistics Service needs to improve its methodology and to conduct more quality research, as the result of our comparison. One can see that the official data often demonstrates the results of the preceding month, hence, lagging 1-2 months behind. Therefore, the information on February show the January or even December tendencies.

Furthermore, the State Statistics Service and BRDO need to compare the data of one another.  

 

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Система Orphus

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