Government plans using information gathered during the National Assessment of Living Conditions to update the pattern and list of goods and services contained in the basket used for measuring the cost of living index and inflation rates.
The Economic and Statistics Office, a department of the Portfolio of Finance and Economics is responsible for calculating the cost of living or consumer price index, and the inflation rate on a quarterly basis. Both are done by conducting a survey of prices in a basket of goods and services, states a GIS press release.
The basket, which currently includes 661 items, was derived from the results of a 1991 survey of income and spending in Cayman’s households. The items are classified in eight groupings and their weights are computed based on the spending patterns of households.
The higher the computed weight, the greater the impact of the group on household budget; for example, the grouping of ‘alcohol and tobacco’ carries a weight of 16, while that of housing is 311.
‘As part of NALC, a household budget survey is being conducted which will be used as the basis for revising the weights of goods and services in the CPI basket to reflect the most recent spending pattern,’ said ESO Director Maria Zingapan.
For one month each quarter – namely March, June, September and December -staff of ESO visit more than 100 shops and other outlets to collect prices of the commodities contained in the CPI basket. The quarterly consumer price indices are then calculated using the estimated weights from the household survey and the prices collected from the quarterly price surveys.
The eight broad groups comprising ESO’s basket of goods and services are food; alcohol and tobacco; housing; clothing; household equipment, transport and communication, education and medical, and personal goods and services.
NALC is spearheaded by the Ministry of Health and Human Services, partly funded by the Caribbean Development Bank and is scheduled for completion by August. The comprehensive study is intended to assess a range of Cayman’s socio-economic conditions, and how they affect residents.
The information gathered from the NALC will be used to assist government in identifying policies, strategies, action programmes and projects, with the objective of improving the quality of life across all strata of society.
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