Methodological Manual of the Consumer Price Index Base Year 2018=100

METHODOLOGICAL MANUAL OF THE CONSUMER PRICE INDEX BASE YEAR 2018=100

METHODOLOGICAL DOCUMENT

NATIONAL STATISTICS INSTITUTE

www.ine.cl

Table of Contents

Chapter 1. Introduction ...... 4 Chapter 2. Summary of changes and improvements ...... 4 Chapter 3. Definition of the index ...... 6 3.1. Definition and purpose ...... 6 3.2. Temporal scope ...... 7 3.3. Geographical and population coverage ...... 7 3.4. Reference framework ...... 8 3.5. Legal framework ...... 10 3.6. International framework ...... 11 Chapter 4. History and development of the index ...... 11 Chapter 5. Designation of weights ...... 14 5.1. Relationship with VIII Family Budget Survey and improvements in the survey ...... 15 5.2. Expenditures included in and excluded from the construction of the CPI basket...... 16 5.3. Treatment of taxes and subsidies (expenditures) in base year 2018=100 ...... 18 Chapter 6. Definition of the consumption basket of the CPI 2018=100 ...... 19 6.1. COICOP classification system ...... 19 6.2. Composition and structure of the basket of the CPI 2018=100 ...... 20 6.3. Selection criteria for groups, products, and varieties of the basket...... 22 6.4. Weighting of the divisions and basket of the CPI 2018=100 ...... 24 6.5. Reweighting ...... 26 Chapter 7. Components of statistical design ...... 26 7.1. Universe and target population ...... 27 7.2. Statistical framework ...... 27 7.3. Sampling frames used ...... 27 7.5. Determination of the number of prices to be collected ...... 30 Chapter 8. Data collection ...... 32 8.1. Variety and its specification ...... 32 8.2. Frequency of price collection ...... 33 8.3. Treatment of collected prices ...... 35 8.4. Products according to treatment of price ...... 39 Chapter 9. Treatment of missing prices ...... 52 9.1. Prices of missing varieties ...... 52 9.2. Treatment of missing prices and imputation methods ...... 52 Chapter 10. CPI calculation algorithm ...... 57 10.1. General calculation algorithm ...... 57 10.2. Aggregation at the elementary level ...... 59 10.3. Aggregation at higher levels ...... 60 10.4. Weights used ...... 62 10.5. Calculation of base year (referential series) ...... 63 10.6. Calculation of variations and impacts ...... 64 10.8. Adjustment factor for updating monetary values ...... 66 10.9. Use of the CPI calculator ...... 69 10.10. Analytical indices ...... 70 Chapter 11. Treatment of changes in quality...... 71 11.1. Replacements and quality changes ...... 72 11.2. Replacement of varieties ...... 72 11.3. Quality adjustments ...... 73

11.4. Hedonic models ...... 76 Chapter 12. Techniques and criteria for ensuring the quality of the index ...... 79 12.1. Validation of data ...... 79 Chapter 13. Dissemination of the index ...... 81 Chapter 14. Program of improvement of the index ...... 81 Chapter 15. Glossary ...... 82 Chapter 16. Bibliography ...... 87 Chapter 17. Appendices ...... 90 Appendix 1. Products of the 2018 basket that changed in description from the 2013 basket ...... 90 Appendix 2. Products of the 2013 basket combined into new products in the 2018 basket ...... 91 Appendix 3. Distribution of the national sample size of the product, by region ...... 92 Appendix 4. Products that use the hedonic model and their main components ...... 93 Appendix 5. CPI basket, base year 2018=100 ...... 94 Appendix 6. Composition of analytical indices ...... 105

List of tables Table 1. Geographic Coverage of the CPI ...... 8 Table 2. Evolution of CPI baskets 1928-2018 ...... 12 Table 3. Components of CPI base 2018=100, by quantity ...... 21 Table 4. Products added to and eliminated from the basket base 2018=100 ...... 23 Table 5. Weightings of the divisions of the CPI base 2018=100 ...... 24 Table 6. Examples of specifications in the basket of the CPI base 2018=100 ...... 33 Table 7. Frequency of monthly collection of prices of the CPI base 2018=100 ...... 34 Table 8. Products of low-frequency collection of the CPI base 2018=100 ...... 35 Table 9. Examples of seasonal products ...... 54 Table 10. Examples of temporary products ...... 55 Table 11. Calendar of seasonality for clothing and footwear ...... 56 Table 12. Methods of aggregation ...... 59 Table 13. Summary of analytical indices, CPI base 2018=100 ...... 71

List of figures Figure 1. Structure and schema of the system of aggregation, CPI base 2018=100 ...... 21 Figure 2. Sources of information and samples for price collection ...... 29 Figure 3. Schema of aggregation for products with special calculations ...... 41 Figure 4. Price collection for the product rents ...... 47 Figure 5. Classification of the CPI according to level of aggregation ...... 57 Figure 6. Algorithm of the calculation of the CPI ...... 58 Figure 7. Schema of the adjustment factor, validity, and reference period of the CPI basket ...... 68 Figure 8. CPI Calculator ...... 70 Figure 9. Sample use of the CPI calculator ...... 70 Figure 10. Schema of monitoring prices in the event of the discontinuity of a variety ...... 73 Figure 11. Algorithm of quality adjustment in the CPI base 2018=100 ...... 74

Chapter 1. Introduction

The National Statistics Institute (INE), in its effort to strengthen its channels of communication with and information delivery to the public, has published the Methodological Manual of the Consumer Price Index (CPI) in its new base year 2018=1001. The change in base year of the index involves reviewing and updating each of its components while enabling methodological and operational improvements in the construction of an updated index that is more precise and more representative of the behavior of prices in the economy. The changes in base year have been undertaken every five years since 2009, following the guidelines of the Organisation for Economic Co-operation and Development (OECD)2. The primary source of the changes is the VIII Household Budget Survey (EPF)3, which is used to produce the various components of the consumption basket with base 2018=100. This methodological manual is addressed to those users who wish to know the statistical concepts and methods underlying the construction of the CPI. The manual presents the most relevant aspects in the construction of the index (among which are technical and operational processes related to calculation) without going into excessive detail. Likewise, this manual seeks to provide answers to the methodological and operational questions about the CPI that users frequently ask INE4. The construction of this manual aligns with international recommendations, standards, and norms as defined in the methodological manual of the CPI of international statistical organizations5 and with the best practices of the internationally prestigious statistics institutes. In addition, the construction of the CPI reflects the experience acquired during the validity of the CPI base 2009 and CPI base 2013. The order of the manual is as follows: first, the manual presents a summary of changes and improvements, in addition to the definition of the index and its evolution. Then, aspects related to the design of weights, the definition of the consumption basket, and the components of the statistical design are described. Next are discussed the operational aspects of data collection, treatment of missing prices, calculation of the index, changes in quality and techniques, and criteria to ensure the quality and accuracy of the index. Finally, the dissemination strategy and the program of continuous improvement of the index are addressed, after which can be found the bibliography, glossary, and appendices.

Chapter 2. Summary of changes and improvements

The CPI base year 2018=100 contains a series of changes with respect to the previous base period (2013=100). The changes have been made both to update the index to the current structure of household consumption and to include methodological and operational improvements in the calculation and collection process, all with the objective of improving the

1 The terms base year 2018=100 and base 2018=100 are used interchangeably in this manual. 2 On 11 January 2010, Chile signed the accession agreement of the OECD, officially becoming the thirty-first member and first Latin American nation to form part of the organization. 3 For more information, see http://www.ine.cl/estadisticas/ingresos-y-gastos/epf. 4 For queries of any kind, please contact the Sub-department of Citizen Information (SIAC) of INE at the following e-mail address: [email protected] 5 OIT et al, 2006, Manual del índice de precios al consumidor. Teoría y práctica.

representativity and reliability of the indicator. These methodological improvements focus mainly on five areas, which are summarized below:

a) Use of hedonic models to make quality adjustments. In the CPI base year 2013=100, the hedonic models were introduced for the technological products televisions, cameras, computers6, and mobile telephone devices7. For the current base year, the use of hedonic models has been extended to the products of division 3, clothing and footwear (see sections 11.3 and 11.4 of this document), and to the products mobile telephone services and bundled telecommunications services of division 8, communications.

b) Incorporation of weights below the product level. According to international recommendations, weighting below level of product improves the accuracy and quality of the index by better representing the tastes and preferences of consumers in their purchasing decisions and by better delineating the market structure associated with the product under analysis. The products affected by these changes are co-ownership expenses, air transportation services, toll services, insurance (related to automobiles and financial instruments), and the products belonging to the classes medical services, paramedical services, and hospital services of division 6, health.

c) Adjustment of expenditure weights. This adjustment was also made during the change in base year 2013. It involves two situations: i) under-declaration of expenditure for products of division 2, alcoholic beverages and tobacco, reported in the EPF VIII and ii) the use of the criterion gross expenditure instead of net expenditure8 in the VIII EPF. To adjust the weightings of expenditure used in the CPI in the first situation, information from the National Accounts of the Central Bank of Chile (BCCh) was consulted. In the second situation, information from administrative records was used to adjust the weightings of used automobiles, games of chance, and insurance.

d) Optimization of the allocation of the number of prices collected. An optimal number of prices to be collected has been established for each product. The number was determined in accord with the relative importance of the product in the basket and the variability of its prices.

e) Increase in the frequency of price collection and in the number of prices. For products of division 6, health, the frequency of price collection was changed from quarterly to monthly. In addition, an increased number of households have been included in the sample of the products rent and domestic service.

In addition, various other methodological improvements were implemented in the VIII EPF (see section 5.1 of this document), which have resulted in a better representation of household expenses and, therefore, in a better and more robust calculation of product weightings. Together, these improvements contribute to increasing the representativity, reliability, efficiency, and relevance of the index.

6 These products belong to division 9, recreation and culture. 7 These products belong to division 8, communications. 8 In general, net expenditure refers to expenditure minus income.

Chapter 3. Definition of the index

3.1. Definition and purpose

The Consumer Price Index (CPI) is an economic indicator that measures the price variation of goods and services from a representative basket of urban household spending. The geographic coverage of the index encompasses all regional capitals and their conurbation zones within the national borders9. The CPI is calculated as an aggregate price index whose behavior is important for understanding the development of inflation in the national economy. The definition of the index has been established under the concept of internal or domestic expenditure that persons resident in the nation incur within the national territory. This definition is consistent with the purpose of the CPI, which is to calculate the price variations faced by consumers within the nation. The CPI is constructed to assure representativity and temporal comparability for safeguarding the precision with which the index, month by month, measures the development of the average price level of the economy. In addition, two other characteristics of the CPI have been added: the variation of the previous month is published within the first eight days of the following month and is not subject to revision10. Representativity is achieved with a selection of the basket of goods and services, which are called products of the CPI. The selection of the basket reflects the consumption patterns of households. It is thus essential that the relative importance of each product selected for the CPI basket accurately reflect the consumption trends of the nation’s households. The more precise the selection of these products, the more representative the index will be. Temporal comparability requires that the defining components of the CPI (products and weights) remain stable over time. Thus, price developments can be measured over time by the use of a base period. That is, from a given month or year onwards, it is possible to quantify the average change in the price variation of certain items or groups of items11.

The CPI is used for a variety of purposes, the most important of which are the following: . Measuring inflation by the Central Bank of Chile (BCCh) with the index and its variation. The BCCh uses this information to define the nation's monetary policy. The index also determines the variation of the Unidad de Fomento (UF)12 and the Unidad Tributaria Mensual (UTM)13. . Bringing to present value or deflating final consumption expenditure of households or other economic series in National Accounts. . Indexing income14, because inflation is an important factor in the adjustment of wages.

9 This definition is supported in OIT et al, 2006, Manual del índice de precios al consumidor. Teoría y práctica, p. 559. 10 OIT et al. (2006), p. 2. 11 For the valuation of adjustments in pesos, use the CPI calculator available on the institutional website (www.ine.cl). 12 UF is a unit of account that is adjusted monthly with the variation of the CPI. 13 UTM is a unit defined in Chile as an amount of money expressed in pesos and determined by law (DL 830, published in the Official Gazette on 31 December 31 1974). The UTM is continually updated by the Consumer Price Index (CPI) and is used for tax measurement. 14 Indexation is a procedure by which monetary values are modified in proportion to a change in prices.

. Adjusting tariffs for various basic services, such as electricity and health services, that use the CPI in their polynomial of calculation. . Serving as a proxy for the cost of living15 and thus enabling the indexation of contracts (for example, of leases16).

For the construction of the CPI, monthly observations are made of the prices of the goods and services of a fixed basket representative of the expenditure (incurred within the national territory) of urban households. This construction is based on the acquisitions approach17, which means recording the total value of goods and services acquired within the country during a determined period, regardless of whether they have been consumed totally or partially in said period; of whether the payment is made in cash, by check, or credit card; or of whether paying incurs a financial liability18. The index and its variation are calculated and published each month according to a pre- established calendar available on the website of INE (www.ine.cl).

3.2. Temporal scope

The reference period or index base is the period19 in which the value of the index is set at 100. All indices subsequently calculated are compared to this period. The reference period of the CPI is the year 2018. Likewise, the price reference period (with which current prices are compared) is the year 2018. The weight reference period of base year 2018=100 comes from the VIII Household Budget Survey (EPF), which was conducted between July 2016 and June 2017.

3.3. Geographical and population coverage

The CPI base 2018=100 is constructed with data on prices and expenditures from the regional capitals and conurbation zones of the sixteen regions of the country20. The list of regional capitals and main conurbation zones of the IPC is shown in table 1, below.

15 Although the CPI is an indirect index of the cost of living, it is often used as a proxy for these purposes. When the CPI is defined as a cost of living index, it measures changes in the amount of expenditures that households must incur to maintain constant their standard of living or utility. 16 Thus, indexation in contracts seeks to keep the purchasing power of money constant. 17 The acquisitions approach is generally taken when the CPI is used as a macroeconomic indicator. Alternative approaches are the uses approach and the payments approach. In the uses approach, the focus is on the consumption of goods and services actually consumed by the household to satisfy its needs and wishes. In the payments approach (for the purposes of the CPI), the focus is on the actual expenditures incurred by households to obtain consumption goods and services. This payments approach is often used when the main objective of the index is to adjust earnings or income. 18 When a good or service is acquired by financing with credit, two economic transactions occur: (i) the acquisition or sale of the good or service and (ii) the creation of a financial obligation (i.e., interest to be paid). 19 The period may be a month, year, or another period. 20 Based on Law 21.033, which “Creates the XVI Region of Ñuble and the Provinces of Diguillín, Punilla, and Itata”.

Table 1. Geographic Coverage of the CPI

Region Regional capital and conurbation zones Arica Arica Tarapacá Iquique, Alto Hospicio Antofagasta Antofagasta Atacama Copiapó Coquimbo Greater La Serena: La Serena - Coquimbo Valparaíso Greater Valparaíso: Valparaíso - Viña del Mar - Quilpué - Concón - Villa Alemana O'Higgins Rancagua Maule Talca Ñuble Chillán, Chillán Viejo Greater Concepción: Concepción - Chiguayante - Penco - San Pedro de la Paz - Biobío Talcahuano - Hualpén Araucanía Greater Temuco: Temuco - Padre Las Casas Los Lagos Puerto Montt Los Ríos Valdivia Aysén Coihaique Magallanes Punta Arenas Metropolitan Greater Santiago: Communes of Santiago, including Padre Hurtado, Puente Alto, region and San Bernardo

Source: National Statistics Institute (INE)

3.4. Reference framework

Below, the theoretical and conceptual framework used in the construction of the CPI base 2018=100 are presented.

3.4.1. Theoretical framework

The theoretical foundation of the CPI is based on index number theory and, in particular, on the concept of a fixed-base price index21. Although the CPI may be considered as an indirect indicator of the cost of living and is frequently used for this purpose, important differences distinguish both indices. The Cost-of-Living Index (CLI) is an index that quantifies the costs faced by households to maintain the same level of satisfaction. It seeks to answer the following question: What is the cost of obtaining the same living standard across time, in reference to a period defined as the base period, at current market prices? This cost is expressed at the lowest level of expenditure necessary to achieve the same standard of living or level of utility obtained in the base period, at prices of the current month. However, this minimum cost cannot be observed directly, thus, the CLI can only be approximated. The development of the CLI requires measuring the expenditure of a basket of goods and services while maintaining equal the level of utility or well-being obtained by the consumer. The well- being of households depends upon both physical and social factors, which cannot be measured

21 Fixed base means that, during a determined period (in Chile, five years), the basket of products and their weights remain constant. In contrast, a chain base index means that the base (basket and weights) is adjusted each year.

by or considered within the concepts of prices. Because of this, the CPI is calculated as an alternative approximation of the CLI. In the production of the CPI, the structure of consumer preferences remains fixed, thus simplifying the measurement of quantities and prices in the construction of the index. The structure of preferences is directly based upon the household consumption of final goods observed in a determined period. The CPI uses formulas and index numbers to approximate the CLI. In general, composite indices with a fixed basket are used. This concept is of a set of products with specific and invariable weights among its component goods and services. The products and weights remain constant until the next change in base year. The set of products usually reflects the proportions of household expenditures for a certain period, known as the reference period of the basket. The price index of a fixed basket is a simple and convenient index used in nearly all of the CPI baskets around the world. Its concept is easy to understand because the cost of a fixed basket can vary in time only because of changes in prices. These fixed quantities are the pattern of expenditure and consumption of the base period and, therefore, form the structure of preferences shown by households during the period. Nevertheless, there is usually an inverse relationship between the convenience of an index with a fixed basket and its precision. This relationship is mainly due to the changes over time of the weights for products purchased and consumed by the population22. Because the basket is anchored to a base period, these changes are not captured. The longer the period between changes of the base period, the more probable it is that the index with a fixed basket does not correctly reflect the behavior of prices observed in the market. If the basket is used for a limited time period (after the reference period), the impact can be greatly reduced, and thus a periodical rebasing is recommended.

3.4.2. Conceptual framework

The construction of the CPI uses a Laspeyres (Lowe23) price index, in which the structure of household consumption remains fixed between reference periods. This structure is based on information from the Household Budget Survey (EPF), which is conducted in a period prior to the base year. In Chile, the base year is updated every five years. Below are some definitions that clarify concepts frequently used in this manual. . Index number: An index is a statistical variable. The index number is the value of a variable at a given moment in time. An index number is also a numeric expression that shows changes in magnitude over time. To produce an index number, several parameters need to be defined, including coverage, base period, and the weighting system, among others.

. Laspeyres Price Index: a price index that uses a vector of fixed weights that are associated with a basket of goods and services of the base period24. Such a basket is usually known in the literature as a fixed-basket price index. The Laspeyres index is calculated as follows:

22 These changes may arise from economic, social and technological factors, as well as from the introduction of new products on the market, changes in consumer tastes, changes in fashions, alterations in the demographic and employment structure of society, and changes in real incomes and relative prices. 23 OIT et al. (2006), p. 3. 24 Fixed amounts associated with the base period (period 0) are used in the valuation of expenditure, and the prices change over time.

푛 1 0 0 1 0 1 ∑푖=1 푝푖 푞푖 푃퐿푎푠푝푒푦푟푒푠(푝 , 푝 , 푞 , 푞 ) = 푛 0 0 ∑푖=1 푝푖 푞푖 Where: 1 푝푖 : Price in period (1) of item 푖 0 푝푖 : Price in base period (0) of item 푖 0 푞푖 : Quantity acquired of item 푖 in base period (0) 푛: Total number of items in the basket

The previous formula can take another form, which is more useful for statistical offices and is more easily understood by users. We define the share of product i in the expenditure of period t with the following formula: 푡 푡 푡 푝푖 푞푖 푠푖 = 푛 푡 푡 for i=1, …, n and t=0,1 ∑푗=1 푝푗푞푗

The index can be reformulated in the following manner: 1 푛 푝푖 0 0 푛 1 0 ∑푖=1( 0)푝푖 푞푖 푛 1 0 1 0 1 ∑푖=1 푝푖 푞푖 푝푖 푝푖 0 푃퐿푎푠푝푒푦푟푒푠(푝 , 푝 , 푞 , 푞 ) = 푛 0 0 = 푛 0 0 = ∑ ( 0)푠푖 ∑푗=1 푝푗 푞푗 ∑푗=1 푝푗 푞푗 푖=1 푝푖

Therefore, the Laspeyres index can be expressed as the arithmetic average of the n price 1 푝푖 ratios, ( 0) weighted by share of expenditure in the base period. As a result, a statistical 푝푖 office needs only to collect information on the shares of expenditure of n products that 0 make up the basket (푠푖 where i=1, …, n) of base period 0 by which the index is defined and periodically collect information on the prices of goods and services of the basket25. In the theory of indices, a Laspeyres index has an upward substitution bias because it does not consider the possibility of households making substitutions resulting from of changes in price relatives nor does it consider the possibility of a change in the level of household income.

. Variation: percentage change of a specified time (t) in comparison with the previous period (t-1). For example, the rate of variation of the CPI, as a percentage, is expressed as [(퐼푃퐶푡⁄퐼푃퐶푡−1) − 1] ∗ 100.

3.5. Legal framework

INE is charged with producing and disseminating the official statistics of Chile and providing reliable and accessible information to users for taking decisions and acquiring greater knowledge of the reality of the country.

25 OIT et al. (2006), p. 309-310.

Articles 29 and 30 of Law 17.374 regulate the collection of information for the indices26. The articles establish the following: Article 29- The National Statistics Institute, fiscal and semi-fiscal bodies, State enterprises, and all their respective officials may not disclose facts connected with any persons or entities acquired in the course of carrying out the duties of their offices. Article 30- Statistical data may not be published or disseminated with expressed reference to the persons or entities to which they directly or indirectly refer, if prohibited by the parties to which reference is made. The strict maintenance of such prohibitions constitutes “Statistical Secrecy”. Any infraction thereof shall incur a penalty described in article 247 of the Criminal Code. The penalty shall in all cases include custodial sentencing.

3.6. International framework

At the international level, the design of most consumer price indices is based on the recommendations and guidelines set out in the Consumer Price Index Manual, Theory and Practice27. This manual was produced in 2006 by international statistical organizations, including the International Labour Organization (ILO), the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the European Statistical Office (EUROSTAT), and the World Bank. The contents of the manual include recommendations regarding methodological improvements that affect the calculation of an index, its scope (uses), its basic conceptual framework, the construction of weights, the selection of sources, the sample design, and price collection, among other subjects. In addition, the recommendations and best international practices gathered from working documents and from the experience of other statistical institutions have been used in the design of the CPI.

Chapter 4. History and development of the index

Since 1928, the Consumer Price Index has made it possible to measure the variation in the prices of a basket of goods and services representative of household consumption. These baskets account for the country's economic, technological, social, and cultural development by measuring changes in consumption habits captured through their evolution28. To produce the CPI every month, around 100 price collectors (enumerators) are required to visit more than 6,500 establishments throughout the country, including neighborhood stores, street markets, supermarkets, commercial stores, fuel pumps, schools, universities, medical centers, hardware stores, telecommunications service companies, banks, and electricity distribution companies, among others. In addition, enumerators consult some private households directly about values paid for rent or domestic service.

26 This law "establishes a new consolidated, coordinated, and updated text of DFL (Decree with the Force of Law) No. 313 of 1960, which approved the organic law Office of Statistics and Censuses and created the National Statistics Institute". Law 17.374 was promulgated on 15 October 1970 and published in the Official Gazette on 10 December 1970. 27 Available at: https://www.imf.org/~/media/Websites/IMF/imported...loe.../manual/.../cpi_sp.ashx 28 For more information on the development and composition of the CPI over time, see the historical baskets of the index of the years 1928, 1957, 1969, 1978, 1989, 1998, 2008, 2009, and 2013 (www.ine.cl).

Throughout the 90 years of the CPI, the basket of goods and services has undergone several updates to adjust to new consumption habits. Table 2 summarizes general information about baskets throughout history.

Table 2. Evolution of CPI baskets 1928-2018

No. Products/ Base Period of Coverage Groups or Source of weighting Validity Period validity Divisions March Survey of employees of the Apr 1928 - 42 products/ 4 1928 = 100 Santiago Directorate-General of 29 years Dec 1957 groups (*) (**) Statistics December Jan 1958 - Greater Santiago, urban 112 products/ 4 I EPF (Nov 1956 - Oct 1957) 12 years 1957 =100 Dec 1969 area groups December Jan 1970 - Greater Santiago, urban 305 products/ II EPF (Sep 1968 - Aug 1969) 9 years 1969 =100 Dec 1978 area 4 groups December Jan 1979 - Greater Santiago, urban 348 products/ III EPF (Dec 1977 – Nov 1978) 11 years 1978 = 100 Apr 1989 area 4 groups

Greater Santiago, urban April May 1989 area of Santiago and 368 products/ IV EPF (Dec 1987 - Nov 1988) 9 years 1989 = 100 - Dec 1998 Puente Alto and San 5 groups Bernardo

Greater Santiago, urban December Jan 1999 - area of Santiago and 483 products/ V EPF (Aug 1996 - Jul 1997) 10 years 1998 = 100 Dec 2008 Puente Alto and San 8 groups Bernardo Greater Santiago, urban December Jan 2009 - area of Santiago and 368 products/ VI EPF (Nov 2006 - Oct 2007) 1 year 2008 =100 Dec 2009 Puente Alto and San 12 divisions Bernardo Year Jan 2010 - 368 products/ VI EPF (Nov 2006 - Oct 2007) 4 years 2009 =100 Dec 2013 15 regional capitals and 12 divisions their principal Year Jan 2014 - 321 products/ 12 conurbation zones VII EPF (Nov 2011 - Oct 2012) 5 years 2013 = 100 Dec 2018 divisions

16 regional capitals and Year Jan 2019 - 303 products/ their principal VIII EPF (Jul 2016 - Jun 2017) 5 years 2018 = 100 Dec 2023 12 divisions conurbation zones

Notes:

(*) There are estimates of the CPI for periods between January 1923 and March 1928. The indicator was then known as the Index of Living Costs in Santiago and the year 1913 was used as the base period. The weightings of the fifty-three products of the basket were determined by the judgement of experts and were divided into six groups of equal weightings. The prices were wholesale prices, and therefore the indicator is not, strictly speaking, a CPI. (**) Using a base period of March 1928, the indicator is known as the Index of Costs of Living in Santiago.

Source: National Statistics Institute (INE)

The most relevant aspects of each version of the IPC basket are described below. In 1928, the first measurement of the CPI (March 1928=100) began. This index is known as the Index of Living Costs in Santiago. It reflected the variation in prices of a basket representative of the consumption of goods and services of sixty-eight families of employees of INE, which was then known as the Directorate General of Statistics. Among the first items included in the basket were French bread (Marraqueta), red wine, cigarettes, ponchos, firewood, charcoal, candles, and streetcar travel. This base period was in force for the longest time (29 years).

With the construction of the base December 1957=100, important advances were made as a result of the commencement (continuing to the present) of the Household Budget Survey (EFP). This survey has been used as a reference to determine the goods and services of the CPI basket and their relative weights, or weighting. Progress was made in establishing specific selection criteria, and the sample of informants was expanded, all with the technical assistance of the United Nations. Thus, the indicator was renamed the Consumer Price Index. The appearance of cola drinks and canned products, in addition to women's and children's clothing (as a complement to men's clothing), stands out in this base period. The base December 1969=100 saw a sharp increase in the number of products included in the basket, reaching 305. New products included electrical appliances (such as refrigerators, washing machines, and sewing machines) and mortgage payments for housing. In the various articles group, blood and urine tests were added to the subgroup medical assistance. To the group education were added syllabaries and textbooks in the subjects of Spanish and mathematics. In addition, the miscellaneous subgroup, which included radios, televisions, and record players, among other products, was created. With the base period December 1978=100, the basket became more detailed. Among the new items that were included in the housing group were water heaters, teapots, and taxes on private housing. In the clothing group, products such as parkas, leather boots for women, and sports footwear appeared for the first time. In the miscellaneous group, notable new products included X-rays, automobiles, motorcycles, bicycles, license plates, rapid transit fare, and color televisions. The base period April 1989=100 incorporated a minimum expenditure criterion for the inclusion of goods and services in the CPI basket. In addition, the number of groups grew from four to five: food, housing, clothing, transport and communications, and miscellaneous goods and services. In the food group, new products included manjar (sweetened milk spread), avocadoes, and pisco. In the transport and communications group, the interprovincial bus fare between Santiago and Viña del Mar and from Santiago to Concepción were included. Also noteworthy is the miscellaneous group, which included photographic film (100-ASA film speed for thirty-six color photos), dog food, identity cards, and university preparation services. With the publication of the base period December 1998=100, associated analytical indices such as the CPIX and the CPIX1 were added to complement information of the general index. In addition, methodologies for quality adjustment in the field (replacement of comparable varieties) and treatment for the change in units of measurement, packaging, and brands were introduced. Among the new products were the garbage removal, computers, photographic cameras, and sightseeing tours. A transitional basket was established with a base period of December 2008=100. Although the geographical coverage continued to be Greater Santiago, the index incorporated the system of Classification of Individual Consumption by Purpose (COICOP). The following year, with the change in base period to base year 2009=100, some of the most significant changes in the index occurred upon the adoption of standards provided by the Organisation for Economic Co-operation and Development (OECD). The purpose of these standards was to facilitate international comparability of measurement. As a result, the EPF was extended to the entire country, and the CPI became representative of the consumption habits of the urban areas of all capital cities and their conurbation zones (national representativity). Another important change in 2009 was the establishment of a regular rebasing of the CPI (every five years). The base period 2009 was also the first to use a calendar year instead of a specific month, thus better representing the seasonal cycle in the price base.

Graph 1. Development of the number of products of each basket

MarchMarzo 19281928 == 100100 42 DecemberDiciembre 1957 1957 = =100 100 112 DecemberDiciembre 1969 1969 = =100 100 305 DecemberDiciembre 19781978 == 100100 348 AprilAbril 19891989 == 100100 368 DecemberDiciembre 19981998 == 100100 483 DecemberDiciembre 20082008 == 100100 368 YearAño 20092009 == 100100 368 YearAño 20132013 = = 100 100 321 YearAño 20182018 == 100100 303

0 100 200 300 400 500 Number of products

Source: National Statistics Institute (INE)

More recently, the base year 2013=100 incorporated quality adjustments with hedonic models for the products televisions, computers, cameras, and mobile telephone devices. In addition, reassessments29 were excluded from the calculation of regulated services (for example, electricity), and temporariness was introduced into the calculation of some products (such as payments for higher education). Furthermore, external sources of information were used to adjust expenditures of the VII EPF. External sources included the use of national accounts (to adjust for under-declared expenditures in Division 2, alcohol and tobacco) and administrative records (to change gross expenditures to net expenditures, as in the case of used cars, gambling, and insurance). The reduction in the number of products in the baskets after 2009, as can be seen in graph 1, is the result of the creation of basket criteria that seek to better represent groups of products rather than to extensively detail each product. This does not mean that unpublished product information was not collected. For example, the 2009-base-period products toy cars, action figures, parlor games, didactic games, dolls, and wheeled toys for children were combined in the base period 2013 to form a single product — toys; all information on the price of these items formed part of the CPI basket 2013=100 as varieties of the product toys30.

Chapter 5. Designation of weights

A most important aspect in the construction of the CPI is an accurate determination of basket weights. Because the CPI is a fixed-basket Laspeyres index, a vector or set of weights that will remain constant during the validity of the basket must be established in such a way that each weight adequately reflects the share of each product in the household budget. The most relevant aspects in the determination of the weights and the selection of products are described below. Likewise, because the main information source for the production of the basket is the

29 Reassessments have been excluded from the calculation of CPI because they affect the level of household income, not the level of current fees in the moment of consumption of the service. 30 For more information, see section 8.1, Variety and its specification, of this manual.

Household Budget Survey, it is briefly described, and the main improvements of the eighth version (VIII EPF) are noted31.

5.1. Relationship with VIII Family Budget Survey and improvements in the survey

The Family Budget Survey (EPF), produced by INE, is an essential reference for updating the CPI. INE conducts the survey every five years in accordance with the Chile's accession agreement with the OECD. The purpose of the survey is to create and maintain the structure of household expenditure used for updating the CPI at least once every five years. This socioeconomic survey is conducted in households within the nation in the main conurbation zones of the sixteen regions of the national territory. The objective of the survey is, for a defined period, to observe consumption patterns and the structure of average expenditure of the target population and to gather information on household income. As in previous versions of the survey, a period of twelve consecutive months (one calendar year) of fieldwork was established in order to incorporate seasonal variations into the structure of household expenditure. In the current version (VIII EPF), the official fieldwork was conducted between July 2016 and June 2017. Being a survey of national scope, the EPF has a sampling design that enables consistent and statistically significant estimates to be made each year for Greater Santiago and the other regional capitals (Greater Santiago + other regional capitals). Thus, the sampling design of the EPF and an accurate collection of data on the final consumption expenditures of households lead to the creation of a robust and nationally representative basket of goods and services with the respective weights of average expenditure within the budget of urban households. In contrast to previous versions of the EPF, the VIII EPF added the communes of Chillán and Chillán Viejo to the sample. A 2018 law created the Region of Ñuble and established Chillán as its regional capital32, thus adding their communes to the new CPI basket. Although the fieldwork of the VIII EPF is conducted (and has a presence) at a more disaggregated level in geographical terms (block, commune, region), the sample sizes at these levels of disaggregation are not sufficient to produce statistically representative estimators of appropriate quality. Thus, the significance of the survey is exclusively at the national level. In addition to being the main source of information for updating the basket of goods and services (and their respective weights) that make up the CPI, the EPF serves as an input for the following processes: updating the levels of poverty and indigence, which are used in the Chile's official measurement poverty; estimating the various components of the institutional sector of households in the compilation of national accounts; and developing studies on quality of life, nutrition, and consumption patterns. In addition, the EPF compiles information on the types of establishments where urban households make their purchases. This compilation is very useful for the design and implementation of price monitoring used in the calculation of the CPI because it provides information on the consumption habits of households and the types of establishments where households purchase goods and services consumed and declared in the EPF (i.e., it provides information on outlets).

31 For more information on the survey, see http://www.ine.cl/estadisticas/ingresos-y-gastos/epf 32 The Region of Ñuble is the newest region of Chile. It officially became a region in September 2018 as established by Law No 21.033, which created the XVI Region of Ñuble and the provinces of Diguillín, Punilla, and Itata. For more information, visit: http://bcn.cl/21vsb

In its eighth version, the survey introduced important methodological improvements, among which the most notable are the following: . Improvements in imputation methods related to the individual-expenditure booklet. . Incorporation of stricter criteria for the evaluation of the quality of information provided by participating households (a checklist of minimum quality standards). . Adjustment of expansion factors of the survey. . Incorporation of an oversample to the target sample in order to reach the expected sample sizes. . Improvements in the measurement and decomposition associated with financial expenditures33.

All of these improvements were incorporated into the survey methodology to improve the quality of estimates. These improvements were taken from conceptual and methodological recommendations of various international organizations and from the good practices of several statistical offices34. Below is a description of the creation of the new CPI basket with 2018 base and its respective weights.

5.2. Expenditures included in and excluded from the construction of the CPI basket

The CPI is a macroeconomic index that measures the average variation in the prices of a representative set of final consumer goods and services acquired by households that reside within the national borders. Thus, it is necessary to establish which expenditures to include in and exclude from the conceptual framework of expenses associated with the index. It must also be determined which expenditures (and their respective weights) to include in the creation of the basket. Final consumption goods and services are understood to be those that households use in order to satisfy their desires and needs (associated with the economic concept of utility). The CPI therefore includes expenditures, associated with monetary payments, for goods and services consumed by households. The CPI excludes those expenditures to which it is not possible to assign a price, such as religious or charitable donations, household investment in

33 An important decrease of 2.0 percentage points was observed in Division 12, miscellaneous goods and services, when directly compared with the weight of the CPI base 2013. This decrease is directly related to the treatment of the product financial expenditure (code CPI 12.4.1.1.1), which belongs to both the current base 2018=100 and the base 2013=100. For this product, an important change and advance were made concerning the disaggregation of the information in the COICOP codification used in the eighth version of the EPF, described below. In the seventh version of the EPF, the COICOP descriptions of the product Financial Expenditure are the following: financial administration expenditures for institutional loans, commissions, and other related expenditures. Financial administration expenditures for loans include interest and related expenditures related to financial expenditure. Nevertheless, by means of the greater decomposition of financial expenditure of the eighth version of the EPF, financial expenditures for interest can be separated from financial administration expenditures, both of which are associated with institutional loans. No significant changes were made in the case of commissions or of any other expenses. In consideration of these facts and following the international recommendations related to the inclusion and exclusion of expenditures, interest associated with financial expenditure can be excluded from the current version and the calculations of weights for the CPI 2018=100. In the previous version, it was not feasible to make this exclusion because of the aggregation of administrative expenditures and related interest. The additional exclusion in the current version decreased the weight of the division. 34 For more information, see: http://www.ine.cl/estadisticas/ingresos-y-gastos/epf

financial assets (stocks and bonds, for example), the purchase of housing as an investment35, social security payments, and tips, which in Chile are not obligatory and are therefore a transfer, not a consumption expense36. Below are discussed the expenses included in and excluded from the scope of the CPI.

5.2.1. Expenditures included in the construction of the CPI basket

The conceptual framework of the expenditures to be included in the CPI basket can be found in the Manual of the 2008 System of National Accounts (SNA)37. The products that must be included in the selection of the basket are all products for which informants reported consumption expenses associated with monetary payments made within the nation, except for any type of social transfer and for those non-monetary expenses such as barter transactions, expenditures of goods and services received as payments or income in kind, expenditures in the production of goods and services for own consumption, and expenditures related to services in owner-occupied dwellings (imputed rent). In general, terms, the expenditures associated with products that are included in the formation of the CPI basket are the following: . Goods and services for final consumption by households. . The acquisition of used automobiles by households in the northern and southern extremes of the nation under the Duty-Free-Zone regime, the marketing margins of used-automobile dealerships, the purchase of used vehicles from companies and from the public sector, and the tax on transfers of motor vehicles38. . Transactions in which the final price includes indirect taxes. For example, the VAT, the tobacco tax, the special tax on fuels, the tax on stamps and seals, and the tax on alcohol, among others. . Administrative fees for services received, such as obtaining a driver's license for motor vehicles, an amateur radio license, or certificates. . Financial expenses (commissions and administrative and operating expenses) associated with mortgage loans, consumer loans, lines of credit, bank credit cards, store cards, and opening and maintaining current accounts. . Rental expenditure actually paid by households. . Membership in clubs or societies that grants the right to use their facilities. . Tax-deductible insurance, automobile insurance, and home insurance. Life insurance is excluded because it represents an investment.

5.2.2. Expenditures excluded from the construction of the basket of the CPI 2018=100

The exclusions specified here apply solely to the construction of the CPI basket, even though the EPF and CPI share the System of National Accounts (SNA) as a conceptual framework.

35 Housing is considered a fixed asset because it produces housing services. Therefore, the purchase of housing is considered to be an investment instead of the consumption of a durable good. Because the CPI does not include capital goods, the purchase of housing must be excluded. For more information, see OIT et al. (2006), capítulos 2 y 3. 36 Tips would be included in the calculation of the CPI if they were an obligatory part of the payment for a service, but this is not the case in Chile. 37 Comisión Europea (CE) et al. (2016), pp. 212-213. 38 This tax is included because the consumer must pay it to comply with established legal requirements when purchasing or selling an automobile.

That is, exclusions of additional expenses from the construction of the CPI 2018=100 basket are based on the CPI methodology and do not apply to the EPF methodology. The definition of the index has been established under the concept of internal or domestic expenditure of residents within the national territory, which is consistent with the purpose of calculating the price variation (inflation/deflation) faced by the nation's consumers. Because inflation (like deflation) is a phenomenon measured by price variations recorded in monetary transactions, only monetary expenditures should be included. Thus, any type of social transfer and non-monetary expenditures39 are excluded. With this premise, for example, the European Statistical Office (Eurostat) uses the concept of monetary expenditure on final consumption by households in construction of its index, which does not include either the consumption of own production (such as agricultural products or owner-occupied housing services) or the consumption of goods and services received as income in kind. In accordance with international recommendations and practices for the elaboration of a CPI, each time an expenditure is identified that is not intended for consumption by households, the expenditure is excluded from the conceptual framework of the construction of the index. Therefore, expenditures associated with barter transactions, owner-occupied housing services (imputed rent), and goods and services produced for own use are not included. Other exclusions concern expenditure on the sale and purchase of used automobiles between households (where no intermediary is involved)40, expenditure for the sale and purchase of second-hand goods (such as used motorcycles), and interest paid on financial intermediation services41. Also excluded are expenditures for goods and services received as income in kind (because they are not monetary expenses), for interest paid on purchases made on credit, and for financial transactions in which a loan is contracted. Other exclusions are investments (because they are considered as gross fixed capital formation42), transfers that do not constitute consumption expenditure, expenditure for goods not considered as own consumption (such as uniforms of non-profit institutions), and expenditure outside the national borders43.

5.3. Treatment of taxes and subsidies (expenditures) in base year 2018=100

The treatment of taxes44 and subsidies45, in the context of the construction of the CPI base 2018=100, follows the conventions adopted in the SNA 2008, especially when it comes to

39 These exclusions are divided into three categories: barter transactions (households exchange consumer goods and services among themselves), payment in kind (households pay for goods and services with work), and the production of goods and services for own consumption. 40 This expenditure is excluded by adjusting net expenditure, which will be discussed in section 6.4.2 of this manual. 41 Interest payments consist of several components that are difficult to break down, making it virtually impossible to estimate them realistically and reliably. Because of the complexity of interest flows, for which different flows have different treatment, the international recommendation (ILO) is the non-inclusion of interest payments in the CPI. 42 Acquisition of dwellings, property, valuables, or financial assets (bonds, stocks, or marketable securities purchased by households) and major repairs to the dwelling that increase the value of the property are also excluded in the EPF. 43 Purchases made within the nation to an overseas supplier are included as expenditures because they are an import. Examples include the purchase of a book through the internet. 44 Taxes are payments made by households or companies to the government. With this income, public expenditure can be financed. 45 Subsidies can be treated as a negative tax in which the price finally paid by a consumer is lower. From a methodological point of view, subsidies are included in the general treatment if they are not discriminatory.

determining whether they are a direct tax or an administrative fee. (This category includes taxes, licenses, and roadworthiness tests.) The following is a summary of the general principles and criteria applied in the CPI base 2018=100: . Taxes/subsidies are mandatory transfers (to or from the State) in which a unit provides another with a good, service, or asset without directly receiving any good, service, or asset in return. That is, they are transactions for which there is no direct, specific compensation. Therefore, they should be excluded from the CPI. . Expenses associated with the payment of consumption taxes or specific taxes are included in the CPI because they tax the consumption of households. Examples of these are VAT and specific taxes46. This is not the case with taxes on income, property, and use of a good or asset, which are excluded from the CPI because they are levied on the generation and use of an asset, not on consumption. Examples include real estate taxes; enrollment in the registry of motor vehicles, boats, or aircraft; roadworthiness tests; and hunting and fishing licenses47. . Administrative fees (or payments) are considered an acquisition of a service, and thus their expenditure is included in the construction of the CPI on the condition that that the government agency provides as a counterpart some kind of service to the person making the payment, such as obtaining a driver's license for motor vehicles, an amateur radio license, or certificates.

Chapter 6. Definition of the consumption basket of the CPI 2018=100

For the CPI, the consumption basket is defined as a specified set of goods and services (products) that consists of the quantities of consumption goods and services actually acquired by households in a given period or that consists of hypothetical quantities48 of such goods and services. Each product belonging to this basket is assigned a weight, which mainly consists of the expenses reported in the EPF. To update of the basket of the CPI base 2018=100, the Classification of Individual Consumption by Purpose (COICOP)49 is used. This classification is mainly used for household budget surveys, the SNA, and the CPI. For the CPI, the COICOP is the starting point for defining which expenditures, in principle, should be included in the CPI. The COICOP is used because it defines which transactions constitute monetary expenditure on final consumption by households. This definition is of vital importance for the subsequent processes of creating the basket and determining expenditure weights of the CPI at different levels of aggregation (division, group, class, subclass and product), as is discussed below.

6.1. COICOP classification system

The COICOP classification system is a functional categorization of the 2008 SNA that imposes a strict separation between goods and services and facilitates international comparability. At present, COICOP is composed of fourteen divisions of which: i) the first twelve divisions refer

46 Examples of specific taxes include the tobacco tax, the specific tax on fuels, the stamps and seals tax, the alcohol tax, and the green tax on new motor vehicles, among others. 47 The convention adopted in the System of National Accounts is to consider these expenditures as current taxes. 48 See OIT et al. (2006), p. 514. 49 In Spanish, the COICOP is known as the CCIF: Clasificación de Consumo Individual por Finalidades.

to final consumption expenditure of households, and ii) the remaining divisions (the thirteenth and fourteenth) refer to the individual consumption expenditure of nonprofit institutions serving households (NPISH) and to the individual consumption expenditure of the general government, respectively. For coding purposes of the EFP and consequently of the CPI, only those divisions referring to individual household consumption and expenditure are included (i.e., an expenditure structure that consists of the first twelve divisions). The codification of the basket of goods and services of the CPI 2018=100 uses the COICOP classification, proposed by the UN, up to the third classification level (division, group and class). However, for the lower levels of subclass and product, a national adaptation50 is used. Although the VIII EPF and the CPI base 2018=100 use the same COICOP classification up to the third level of classification, some differences remain because the level of disaggregation of EPF is greater than that of IPC51. Thus, the EPF must be coherently adapted to the expenditure structure of the CPI to obtain a basket of goods and services at the level of product and to determine product weights.

6.2. Composition and structure of the basket of the CPI 2018=100

The CPI aggregation system for the selected goods and services is structured to ensure that each good or service (product) occupies a single place and that it is always possible to obtain the total, at given level of the structure, resulting from the aggregation of lower levels. Thus, the products of the CPI basket are ordered into twelve divisions (the highest level of aggregation), which are formed from the aggregation of groups. The groups consist of classes, which in turn consist of subclasses. Subclasses are the result of the aggregation of products, which are in turn an aggregation of varieties (the elementary aggregate). It is possible to make international comparisons with indices at higher levels of aggregation, while elementary aggregates such as subclass, product, variety, and variety-establishment are subject to the definition of each country according to its own characteristics. The schematic design of the system of aggregation can be seen below in figure 1.

50 For comparative purposes, the United Nations standardizes and makes available the classification only up to the third level because the last two levels are to be adapted by nations to their particular circumstances. 51 This occurs because the VIII EPF seeks a greater level of disaggregation of the expenditures of the population than is necessary for inclusion in the basket of the CPI base 2018=100. For more information, see section 6.3.1 of this manual.

Figure 1. Structure and schema of the system of aggregation, CPI base 2018=100

Source: National Statistics Institute (INE)

To illustrate the classification according to national circumstances, Chilean consumption habits lead to the existence of certain goods that are categorized by COICOP as of a certain class, but their acquisition or habitual purpose at the local level leads them to be categorized as of another class. For example, although the products tomatoes, avocadoes, and lemons are fruits (and are thus categorized in COICOP), in Chile they are categorized as of the class vegetables, legumes, and tubers because national consumers use them as vegetables. The basket of the CPI base year 2018 consists of 12 divisions, 41 groups, 88 classes, 136 subclasses, and 303 products as can be observed in table 3, below.

Table 3. Components of CPI base 2018=100, by quantity

Division Groups Classes Subclasses Products 1. Food and non-alcoholic beverages 2 11 35 76 2. Alcoholic beverages and tobacco 2 4 4 8 3. Clothing and footwear 2 5 10 28 4. Housing and basic services 4 9 11 16 5. Household furnishings, 6 10 13 36 equipment, and maintenance 6. Health 3 7 8 22 7. Transportation 3 10 14 24 8. Communications 2 2 2 6

Division Groups Classes Subclasses Products 9. Recreation and culture 5 16 22 37 10. Education 5 5 5 11 11. Restaurants and hotels 2 2 3 7 12. Miscellaneous goods and services 5 7 9 32 TOTAL 41 88 136 303

Source: National Statistics Institute (INE)

This structure ensures the statistical continuity of the index as well as its international comparability at the levels of division, group, and class.

6.3. Selection criteria for groups, products, and varieties of the basket

The CPI base year 2018 seeks to update the structure of the basket to represent the changing consumption patterns of households. The construction of this basket requires that a representative set of goods and services be selected by applying general and particular criteria to the information on expenditure reported by households in the VIII EPF.

6.3.1. Selection criteria for groups and products of the basket

The general selection criteria applied to goods and services at the level of group and product are the following:

. At group level, the minimum weighting of total expenditure is as follows: - 0.1% for division 1, food and non-alcoholic beverages. - 0.2% for the rest of the CPI divisions. . Once the groups for each division have been selected, the products are included that meet the following criteria: - Minimum weighting of products of 0.020% in total household expenditure. - Presence of product expenditure in four of the five quintiles according to per capita disposable income. . Finally, products for which there is no operational feasibility of collecting prices (operational criterion) are excluded.

The basket of CPI base 2018=100 includes a new product, online subscription services, which is associated with the consumption of streaming or online content. Examples of this product include Netflix, Spotify, and Apple Music, among others52. On the other hand, three products have ceased to form part of the basket mainly as a result of their obsolescence or non-compliance with the selection criteria.

Table 4, below, summarizes these changes in the 2018 basket.

52 Examples include Netflix, Spotify, Amazon subscriptions, online games subscriptions, QELLO Concerts (online concerts), and increased online storage capacity (Dropbox, i-cloud, and others).

Table 4. Products added to and eliminated from the basket base 2018=100

Products Products added to D G C SC P Product eliminated from the basket the basket 9 3 2 3 2 Online subscription Services* X 3 1 2 1 4 Suits for men** X 9 2 3 1 3 Soil and fertilizers ** X 12 5 1 1 6 Legal services** X

Note: D: Division, G: Group, C: Class, SC: Subclass, P: Product. * Classification, CPI 2018=100. ** Classification, CPI 2013=100 Source: National Statistics Institute (INE)

The rest of the products belonging to the basket of the CPI base year 2018 are products that remain from the previous basket. Most of the descriptions of these products did not change from the previous basket, but a few descriptions were modified53. In addition, some products were merged with others54. For more information on these changes in the new CPI basket, see Appendices 1 and 2.

6.3.2. Selection criteria of varieties of the basket of the CPI 2018=100

In the CPI, a variety, which is commonly known as an article or product, is a set of specific attributes or characteristics and is sold in stores. Varieties make up a specific product, but they normally do not have weights55. They are the elementary level, that is, they are the items for which a price is collected in a previously determined establishment. The information used to select varieties comes from market studies, structural surveys, and large chain stores. Sales information of the year 2017 determines the varieties that make up the basket of the CPI base 2018=100. The relevance of varieties is reviewed annually. For this purpose, the market share from the previous year is used to ensure that the varieties are the most representative of household consumption. The following general criteria are used to select a variety:

a) Representativity: the varieties with the greatest relative weight are included in the sales of the establishments most representative of household consumption.

b) Permanence: the variety must be present on the market for at least a reasonable period of time (a minimum of two months).

c) Level of difficulty in the measurement: the selection of varieties that are less difficult to measure and monitor over time is prioritized. This prioritization is based on field observations and on experience gained from the registration of establishments. From an operational point of view, highly complex varieties were only selected when strictly necessary.

53 See appendix 1, Products of the 2018 basket that changed in description from the 2013 basket. 54 See appendix 2, Products of the 2013 basket that were combined to form new products in the 2018 basket. 55 Some products that have been determined to be special products have weights below the level of product. In these cases, the varieties are weighted by using market-based information.

Because varieties are one of most elementary levels of the CPI and do not have weighting, they are subject, during the validity of the base, to revisions and modifications to better reflect changes in household consumption at each moment in time.

6.4. Weighting of the divisions and basket of the CPI 2018=100

Weights were obtained from the information collected during the VIII EPF from July 2016 to June 2017. A total of 15,239 households in the conurbation zones of the sixteen regions of the nation were surveyed, forming the sample of the national total and determining the amount of the budget destined for the acquisition of each of the goods and services that make up final consumption expenditure. The expenditures collected in the VIII EPF were previously expanded and transformed to account for monthly expenditure. These expenditures provide the input for the construction of the weighting structure necessary to aggregate the indices at the various levels of the CPI. However, it should be noted that the base period of the CPI is the year 2018. For the CPI base 2018=100, the weights are valued in pesos of the period when the EPF was conducted. The prudent criterion of not making updates of any kind without basing them on information from a family budget survey has been followed. This criterion was also followed in the last two changes of base years (CPI base 2013=100 and base 2009=100). By applying the criteria of inclusion and exclusion mentioned above, the structure of weightings by divisions was determined, as detailed below in table 5.

Table 5. Weightings of the divisions of the CPI base 2018=100

Weighting, CPI 2018=100 Division basket (%) 1. Food and non-alcoholic beverages 19.30131

2. Alcoholic beverages and tobacco 4.77767

3. Clothing and footwear 3.50596

4. Housing and basic services 14.82720

5. Household equipment and maintenance 6.52285

6. Health 7.76778

7. Transportation 13.12148

8. Communications 5.45488

9. Recreation and culture 6.58912

10. Education 6.59568

11. Restaurants and hotels 6.38347

12. Miscellaneous goods and services 5.15260

Source: National Statistics Institute (INE)

The complete basket of the CPI base 2018=100 can be found in Appendix 5 of this manual.

6.4.1. National Accounts based definition of weights and adjustments

From the definition of the basket, the proportion of expenditure that households make on each product is obtained. Following international recommendations for this process, statistical adjustments were made to the expenditure information on products from the VIII EPF because household income and expenditure surveys are a statistical exercise prone to bias. Thus, it is advisable to contrast the results with statistics from other sources and, in the event of discrepancies, to carry out these adjustment methods. The weights for products such as used automobiles, insurance, and games of chance have been adjusted because the EPF uses the criterion of gross expenditure. These products were adjusted with information from administrative records56 to obtain a net weight (expenditure minus income) that is consistent with the purposes and approach of the CPI. With information from National Accounts, the expenditures in Division 2, alcoholic beverages and tobacco, have been adjusted because these expenditures are usually underreported in household budget surveys57.

6.4.2. Net value adjustments

The weightings of the CPI base 2018=100 are based on the VIII EPF, although in some cases it has been necessary to make adjustments in the expenditures reported in the EPF to adapt them to the conceptual requirements of the CPI. The objective of the EPF is to measure the level and development of expenditure of households for goods and services intended for consumption, regardless of the monetary consideration (compensation or subsidies) that the household may afterwards receive as a result of that expenditure and regardless of the sector (households or companies) in which the transaction was made. This methodological definition differs from that of the CPI because, in the CPI, it is necessary to identify the net expenditure (expenditure minus income)58 of households. These adjustments are based on information from administrative registers59. The EPF includes the total expenditure made by households, regardless of any monetary compensation that they may have received. However, in accounting terms, the amounts received by the household must be deducted from expenditure so that they include net expenditure after subsidies and compensation. On the other hand, transactions between agents belonging to the same institutional sector are not considered expenditure. The EPF includes expenditures made on all transactions made by private consumers60, regardless of the sector in which the transaction was made. However, transactions between households, as they constitute a transfer, should not be taken into account in the calculation of the basket weights. Thus, for example, expenditure for used

56 Short-term Survey of Commerce (INE), Survey of Automobile Registration of the Office of Civil Registration and Identification, the Superintendency of Securities and Insurance, and the Superintendency of Gambling Casinos, among others. 57 For more information, see Manual del índice de precios al consumidor (OIT et al, 2006) and Guía Práctica para el establecimiento de Índices de Precios al Consumidor (UNECE et al, 2009). 58 The EPF includes the total expenditure made by households, regardless of the possible monetary compensation that they may have received. However, in accounting terms, the amounts received by the household must be deducted from expenditure so that only the net expenditure is included after subsidies and compensation. 59 Short-term Survey of Commerce (INE), Survey of Automobile Registration of the Office of Civil Registration and Identification, the Superintendency of Securities and Insurance, and the Superintendency of Gambling Casinos, among others. 60 This includes the purchase of used automobiles and motorcycles. This methodological decision was taken because the purchase of these goods are important in Chilean households.

automobiles must be adjusted because the expenditure reported in the EPF includes purchases from companies and from other households. In view of the above, and given that the expenditures reported in the VIII EPF are gross expenditures, adjustments must be made for some products in the basket of CPI base 2018=100 to obtain the corresponding net household consumption expenditure and, consequently, a net weighting, consistent with the purposes of the index. Some of the advantages of using net expense are as follows: . It is an internationally recommended criterion. . It is consistent with the acquisitions approach used in the CPI base 2018=100.

Based on these arguments, it follows that adjustments must be made to expenditure associated with the following products of the CPI base 2018=100: . Expenditure for the purchase of used automobiles. . Expenditure in casinos and games of chance. . Expenditure for insurance (vehicle and other insurance).

6.5. Reweighting

The updating of the CPI basket and its weights follows the 2009 calendar, which established that the updating process must take place every five years. Thus, the EPF is scheduled so that the structure of household expenditure is available one year before the change of base year of the CPI. Between these periods of updating the basket, the products and their weights remain fixed from the product level to the division level because the CPI is a Laspeyres fixed-basket price index, which is a kind of a Lowe index61. At the lower levels (variety and variety-establishment), there is no weighting. Therefore, varieties are self-weighted62 and updated annually.

Chapter 7. Components of statistical design

The complex nature of the concept behind price indices (i.e., the price changes in a wide range of goods and services as well as the statistical and operational challenges that arise in measuring these changes) makes it difficult to interpret and assess the statistical accuracy and precision of the CPI. Thus, the statistical precision of a CPI depends mainly on available price data and consumer spending. The data used in the configuration of the average-expenditure weights are obtained directly from the EPF, following the sample design of the survey63. In addition, an adequate design is indispensable for the selection of companies and of prices to be collected. With an adequate design, consistent and reliable observation of prices can be made in the selected outlets, as described below.

61 In a Lowe index, the weightings for expenditure are based on a period previous to price collection. See OIT et al (2006) for a more comprehensive explanation of this kind of index. 62 When special calculations are required and when information exists on market share of companies at which prices are collected, a geometric or arithmetic mean weighted by market share is used. 63 For more information, see Metodología VIII Encuesta de Presupuestos Familiares, 6. Diseño estadístico de la encuesta [Methodology of the VIII Family Budget Survey, 6. Statistical design of the survey], págs. 50-98. National Statistics Institute (INE).

7.1. Universe and target population

Once the products and weights of the CPI basket have been determined, the next question is where the price information needed to calculate the index will be collected. The answer involves identifying the universe and target population of establishments. The universe consists of all the establishments in which a consumer purchases goods or services for final consumption. This includes companies, establishments, subsidiaries, schools, institutions of higher education, and public-service companies, among others. The target population is defined as all establishments in which a consumer acquires goods or services for final consumption. These establishments are located in all regional capitals and their conurbation zones within the borders of the nation (i.e., Greater Santiago and the other regional capitals).

7.2. Statistical framework

To ensure that the collected prices are representative and are of sufficient quantity for the purposes of the CPI, an appropriate sampling method must be applied in the selection of outlets. The selection of outlets must also consider cost-effectiveness. To include all the prices of goods and services existing in the economy for the calculation of the CPI would be both complex and costly from the point of view of the collection, processing, and analysis of data. Furthermore, it would be an impossible task to complete in the time available for the publication of the index. The selection of the sample of outlets where prices are collected may use probability or non- probability techniques. Selecting outlets by random sampling with known selection probabilities ensures that the selected sample is not distorted by subjective factors and thus enables sampling errors to be calculated. In order to develop a probability sample, it is necessary to have an exhaustive frame (i.e., a complete list of outlets for potential sampling). However, the available sampling frames are often not complete and do not properly meet the needs of the CPI. In addition, probability sampling is very costly. On the other hand, it is possible to select outlets using non-probability methods. These methods include purposive sampling, quota sampling, and cut-off sampling64. For all of these methods, the best available information is used to ensure that the selected sample is representative. The sample of outlets must be examined and updated periodically. In practice, the use of purposive sampling is the most widespread method because it is considered the most cost-effective. When a non-probabilistic selection of outlets is chosen, sampling errors cannot be estimated. Because of the complexity and high costs of obtaining updated and complete frames and their corresponding selection, the selection of outlets for the CPI 2018=100 uses both purposive and cut-off sampling (mainly in atomized markets, where the aim is to include in the sample those companies that together make up a minimum 85% of market share).

7.3. Sampling frames used

The sampling frame is understood to be an exhaustive list of all the establishments, or units, of a target population.

64 For more information, see OIT et al. (2006), párrafo 36, p. 562.

The sources of information used to compile the CPI base 2018=100 include the sampling frame of the VIII EPF, the products (and therefore the prices) of the basket of the CPI base 2013=100, the national directory of establishments of INE, the directory of special samples, and specific studies of products and varieties (such as studies to determine the market shares of establishments and the most representative products sold in these establishments). To complement the sources mentioned above, various instruments support the information collected, including the following:

. The verification survey of companies and establishments. This survey disaggregates company outlets (establishments) to obtain the necessary data for the construction of the sampling frame of the survey of outlets. . The survey of outlets. With the data from this survey can be obtained the percentage distribution of sales of groups of similar products with respect to the total sales of each establishment, in addition to the distribution of the consumption of products by type of establishments and geographical area. This survey was conducted in parallel with the survey of the VIII EPF. . Variety product survey or census survey. This survey consists of verifying the presence of product-varieties of the CPI basket by type of establishment, according to geographical areas of interest. . Studies based on administrative records and external sources. INE analyzes other available administrative registers including those from the Internal Revenue Service (SII), the Ministry of Transport, and pension fund administrators, among other institutions. In addition, INE collects and sales data from retail stores annually. The integration of these different sources and their processing provide definitions of price samples by product65, price samples by outlets, price samples of products and varieties by establishment and by type of variety, special samples, and finally, the sample for price collection. The interrelationships between each of these sources are shown in figure 2, below.

65 The quantity of prices to be collected is a function of the weighting of the product in the basket and the variability of prices of the varieties that make up the product. At greater levels of weighting and variability, a greater number of prices must be collected. For more information, see section 7.5 of this manual.

Figure 2. Sources of information and samples for price collection

Source: National Statistics Institute (INE)

7.4. Selection of the sample of establishments

In addition to determining the number of prices to be collected, it is necessary to determine and identify the establishments that will be visited each month to obtain these data. For the selection of the establishments of each type (such as hypermarkets, supermarkets, specialized stores, etc.) where monthly prices are to be collected, the establishment’s market share of each of the products and varieties of the CPI basket base 2018=100 is considered. The establishments with the greatest market share and, as far as possible, those located in the large commercial areas of each city are selected. This selection process is contrasted with the operational organization of the monthly survey routes.

7.4.1. Selection of sources

The sources are those establishments where the price of a variety is consulted every month. From the most representative types of establishments in which the products are sold, the specific sources are determined where the prices of the previously defined basket are to be collected monthly, taking into consideration the following factors: . The market share of each establishment for the products and varieties of the CPI basket base 2018=100. The sample of establishments includes establishments with the highest relative participation, covering at least 85% of the market. . As far as possible, the establishments located in the large commercial areas of each city are selected. This selection process is contrasted with the operational organization of monthly survey routes. . Big cities, like Greater Santiago, are arranged according to the cardinal directions, and establishments are then selected within these four zones. This selection process ensures that replacements that may occur in the future maintain geographical proportionality.

7.5. Determination of the number of prices to be collected

Having established where prices are to be collected, it should be explained how the quantity of prices to be collected is determined so that the prices are representative and consistent with what occurs in the market. The quality of the index is strongly influenced by the selection of the specific criteria used to collect prices, which are associated with each product at their respective outlets, included in each elementary aggregate of the CPI. An ideal representation of the price variation of products included in the basket of the CPI base 2018=100 is the objective of determining the necessary quantity of prices to be collected. Thus, an appropriate sample size is established according to the weighting and variability of prices of each product at the national level. The sample size is then distributed at the regional level.

7.5.1. Determination of the national sample size for each product

To determine of the sample size at national level by product, the variation of the elementary aggregates in the period 2016–2018 and the product weighting according to the CPI base 2018=10066 are used. Some products of the CPI basket were omitted during this procedure because they have a centralized collection process67. Each division of the CPI was treated as an independent population, with the exception of divisions 1 and 2 because they are food and beverages, and of divisions 4 and 5 because they are considered household and housing-related products. First, the sample sizes for each product at the national level were determined by simple random sampling with a 95% confidence level of the variance estimate and the average of the elementary aggregates of each product. The target sample size is calculated according to the following formula: z2 ∗ s2 ∗ 1−∝/2 푝 푛푝 = 2 (1) 2 IVE푝 ∗ ε ∗ Where 푛푝 is the initial target size of prices to be collected for product 푝, z1−∝/2 is the standard normal distribution with confidence level of 95%, IVE푝 is the average price variation of product 푝 (average variation of the elementary aggregates associated with product 푝 in the period 2016- 2 2018), s푝 is the quasi-variance of the variations of product 푝 (quasi-variance of the elementary aggregates associated with product 푝 in the period 2016-2018), and ε is the relative error, which is set at a maximum of 5%. Simple random sampling considers only the relative variation of the actual prices and not the weighting of the products in the basket. To avoid this situation, a classification algorithm (cluster analysis) is applied that recognizes products with similar coefficients of variation and basket weighting within their respective CPI division68.

66 Because there is no information on price variation at the product level for new products incorporated into the current basket, sample sizes are determined by simple random sampling on the basis of price variation at the level of subclass, class, or group to which the new product belongs. Also excluded from this method are the products with special calculation and special treatment, which are described in later sections. 67 Special products use cut-off sampling in accord with studies based on structural surveys or other complementary sources of information, seeking to represent 85% of the market on each occasion. 68 The cluster analyses studied were K-means clustering and Hierarchical Methods such as Centroid, Furthest neighbor, and Ward’s method. This last method showed the best results for the requirements of the cluster analysis.

Therefore, the variables for classification (i.e., cluster analysis) are the weighting of the product within the division and the coefficient of variation of the elementary aggregates of each product at the national level. Prior to applying the cluster method, both variables are rescaled to values between zero and one hundred. This gives a theoretical price size for each cluster, defined as the sum of the initial sample sizes.

∗ 푛푑푘 = ∑ 푛푝 (2) j ∈k

∗ Where 푛푝 is the initial theoretical size of prices for product 푗 by simple random sampling and 푛푑푘 is the total number of prices to be collected from cluster 푘 of division 푑. Subsequently, the clusters are ordered69 by the importance of the weighting and the coefficient of variation of the products so that a sampling error can be determined such that the objective sizes for each product can be established according to the order of the clusters. That is, the higher weighting and price variability, the greater the number of prices to be collected. By means of this typology, it is possible to distribute the sample size of the cluster to each product (푛푝) according to its importance. ′ ′ 푊푝 ∗ 퐶푉푝 푛푝 = 푛푑푘 ′ ′ (3) ∑푝 ∈ 푘 푊푝 ∗ 퐶푉푝

Where 푛푝 is the sample size of prices to be collected at national level for product 푝, 푛푑푘 is the ∗ ′ total sum of the 푛푝 variables that were initially calculated and that belong to cluster 푘, 푊푝 is ′ the rescaled weighting of product 푝 within division 푑, and 퐶푉푝 is the coefficient of variation rescaled for each product 푝 in a time window that includes the years 2016-2018, of division 푑. In conclusion, the procedure described above gives larger sample sizes to products with greater weighting and price variation. The objective sample sizes of prices to be collected within the national territory for each product, expressed in equation (3), are then distributed among the regions.

7.5.2. Distribution of national sample size of the product by region

Once the number of prices to be collected for each product at the national level has been obtained, the second phase determines the number of prices to be collected per product at the regional level. The second phase has two steps. In the first step, information on reported expenditure in the different macro-zones of the VIII EPF70 is used to establish the number of price collections per product according to macro-zone. Subsequently, based on the weighting of the regional population as reported by the Demographic and Vital Statistics of the National Statistics Institute (INE), a regional

69 To order clusters, the Euclidean distance between the mean weighting and the mean coefficient of variation of the rescaled products within the division is calculated. 70 Four macro-zones have been defined for the VIII EPF: i) the Northern Macro-zone, which includes the regions of Arica y Parinacota, Tarapacá, Antofagasta, Atacama, and Coquimbo; ii) the Central Macro-zone, which includes the regions of Valparaíso, O’Higgins, Maule, Ñuble, and Biobío; iii) the Southern Macro-zone, which includes the regions of la Araucanía, los Lagos, los Ríos, Aysén, and Magallanes; and iv) the Metropolitan Macro-zone, which includes the Metropolitan Region.

approximation is made of the quantity of prices to be collected for each product 푝. This procedure is described in Appendix 3 of this document.

Chapter 8. Data collection

As noted in previous sections, the quality of the information correlates positively with the precision of the index. The short-term collection of data and prices is an operation that requires complex fieldwork by a large number of price enumerators (i.e., price researchers) in charge of this activity, which necessarily entails exhaustive planning and management71 to ensure the correct measurement of the monthly change in prices. The collection of monthly information also requires a definition of the varieties, the availability of their specifications, and price collection procedures.

8.1. Variety and its specification

A variety is a good or service that forms the basic or elementary unit of the CPI basket and is defined according to a set of pre-established attributes or specifications, such as brand, description, size, content, packaging and origin, among other specific characteristics72. Varieties, in principle, have no associated weighting. A set of varieties makes up a specific product. The price of each variety is collected in predetermined establishments, giving rise to the concept of variety-establishment. The objective of the collection is to obtain the prices of previously selected varieties that are most representative of the consumption and thus are the highest selling. Varieties are determined according to market share for all the establishments in the sample. Then, for price monitoring and collection, the relevant characteristics of the variety are included as specifications in the price collection forms. A basket specification is a description of the most relevant aspects or characteristics of a variety, which determine the price level and its associated development. Thus, the specifications used to collect prices ensure comparability of the variety between successive periods and facilitate the selection and evaluation of the replacements proposed by the enumerator. These specifications, depending on the degree of precision, make it possible to identify all the characteristics necessary for the comparability of the goods or services collected at the same outlet in successive periods. Thus, basket specifications can be tight or loose.

. Tight specification: allows the price researcher to easily identify the variety among all the alternatives. He therefore has less discretion when collecting the prices73. For heterogeneous varieties (women's shoes, for example), the specification requires greater detail to maximize comparability between periods. This level of detail is needed

71 Planning and management activities include establishing the logistics for the collection of prices in addition to executing, supervising, and finalizing collection. 72 For more information, see section 6.2 of this manual, Composition and structure of the basket of the CPI base 2018=100. 73 Turvey, R. et al. (1989), p. 54.

because of the substantial differences among varieties74. In the case of homogeneous varieties (such as gasoline), the specification requires less detail.

. Loose specification: adapts to rapidly changing consumer tastes75. With this type of specification, the price researcher must choose the particular variety whose price will be collected. Once the variety is chosen, it must be complemented with field specifications by recording its description or, for example, indicating its future location. Field specifications are the specific characteristics that define and determine the variety that is to be collected monthly.

Below, table 6 shows some examples of basket specifications.

Table 6. Examples of specifications in the basket of the CPI base 2018=100

Product Code Variety Specification in the basket Red - similar apples; bulk or Apples 1.1.6.1.1. Apples packaged up to 2000 g Special pisco 35% or 40% alcohol; Pisco 2.1.1.1.1. Pisco from 700 to 1000 cc. Principal material: natural, Blouses and T-shirts Autumn/winter blouses for synthetic, artificial fiber, or fancy or 3.1.2.2.3. for women women mixed yarns; sleeve: ¾-length; sizes: S - M - L - XL, or equivalent

Source: National Statistics Institute (INE)

8.2. Frequency of price collection

The prices needed to calculate the CPI are obtained in two ways. The first is to obtain prices directly at the selected outlets. The second way is to obtain prices directly from the headquarters of the establishment. This second way is called centralized collection. Centralized collection is used when: a) the price level in the various establishments of the same company is identical and defined by company headquarters76, or b) prices are collected at companies that provide regulated services77. In both cases, the information is collected directly from the head office, thus avoiding the need to visit each of the company's establishments. The frequency with which prices are collected depends on their variability. Thus, for example, goods and services with greater price volatility are more frequently collected during a period (from one to five collections in the month) 78. In contrast, for varieties whose prices change once a year (educational services, for example) the collection of prices takes place less frequently (once a year). Experience supports the decision to collect prices during the first three weeks of the month, with the exception of fuels (five collections if the month has five weeks), fresh fruits and vegetables (four collections per month), alcoholic beverages, and non-perishable foods (two

74 UNECE et al. (2009), p. 58. 75 UNECE et al. (2009), p. 53. 76 Examples of this method include the collection of prices of medications, air transportation services, university education, and clothing and footwear in specialized stores. 77 Examples of this method include the collection of prices for drinking water, electricity, and taxi transportation services in the Metropolitan Region, and multimode transportation services. 78 Examples include fuels and fresh fruit and vegetables.

collections per month). For clothing and footwear, only one collection is made per month. The details of the monthly price collection of the survey are shown in table 7.

Table 7. Frequency of monthly collection of prices of the CPI base 2018=100

Monthly collection of prices (No. of times per month) Divisions/Products 1 2 3 4 5 Division 1: Perishable foods, fruits and vegetables, x x(a) including meat, fish, and dairy(a) Division 1: Non-perishable foods x Division 2: Alcoholic beverages and tobacco(b) x(b) x Division 3: Clothing and footwear x Division 4: Housing and basic services x x(c) x(c) Division 5: Household equipment and maintenance x Division 6: Health x Division 7: Transportation, except fuels(d) x x(d) x(d) Division 8: Communications x Division 9: Recreation and culture, except tickets to x x(e) x(e) sporting and cultural events(e) Division 10: Education (courses in language institutes) x Division 11: Restaurants and hotels. Take-out food (f) and x(f) x food consumed outside the home Division 12: Miscellaneous goods and services x

Notes: When an X appears alone in the table, it refers to all products of the division. When an X appears with a letter in parentheses after it, it refers to the following exceptional cases: (a) Collection of part of the sample is on Saturday. (b) One centralized collection is conducted each month. (c) Prices of gas and kerosene are collected every week. (In some months, this may mean there are five price collections.) (d) Prices of fuels are collected every week. (In some months, this may mean that there are five price collections.) (e) The number of price collections depends on the number of dates in the official soccer championship and on the number of shows offered. (f) The price of take-out food is collected once per month. Source: National Statistics Institute (INE)

From an operational point of view, prices are collected from Monday to Friday and from the first to the twenty-first day of each month (this period ends on the last working day of the third week of collection)79. In addition, prices are collected on the second Saturday of each month80, with the exception of September and December when collection takes place on the first Saturday. Prices for food are collected in the morning between 9:00 a.m. and 12:00 p.m. with an emphasis on street markets and restaurants. In the afternoons, emphasis is on the collection of prices of the remaining divisions. From the twenty-second of the month (the fourth week of collection), the establishments where prices were not available on the scheduled date of collection are visited again. Finally, the collection process concludes on the twenty-sixth of each month.

79 For operational purposes, the month is divided into weeks, beginning on the first day of the month. The second week of the month thus begins on the eighth day. 80 For this collection, a part of the sample of establishments has been selected.

In the case of financial expenses, electricity, drinking water, insurance, and mobile and fixed- line telephone services, among others, the cut-off date for valuing the services is the fifteenth of the month, and information is received up to the twentieth of the month. Some products are collected less frequently because of their observed variability in the market. In some cases, the low frequency of collection is due to the price changes occurring only a few times during the year. In other cases, the presence of these products is temporary or the value of the service is set once a year and thus price collection is concentrated in the months in which the products are present in the market. Table 8, below, shows these cases.

Table 8. Products of low-frequency collection of the CPI base 2018=100

Number of D G C SC P Product description Months of collection collections per year 3 1 2 4 1 School uniforms and sportswear January and February 2 Sandals (July to January) and 3 2 1 3 2 Footwear for children 7 boots (January to July) 4 3 2 1 1 Garbage collection service April and September 2 5 3 1 1 3 Household heating appliances April to August 5 Taxi transportation services 7 3 1 1 2 January and July 2 (Metropolitan region) 7 3 1 1 3 School bus transportation services March and August 2 9 2 1 1 1 Toys April and December 9 9 2 2 1 2 Camping equipment December, January, and February 3 9 4 1 1 1 Textbooks February and March 2 10 1 1 1 1 Pre-primary education services December 1 10 1 1 1 2 Kindergarten education services December 1 First phase of primary education (first 10 1 1 1 3 December 1 to fourth grade) second phase of primary education 10 1 1 1 4 December 1 (fifth to eighth grade) 10 2 1 1 1 Secondary education services December 1 10 3 1 1 1 University preparation services February 1 10 4 1 1 1 Training in technical centers January 1 10 4 1 1 2 Professional institutes January 1 10 4 1 1 3 University education January 1 10 4 1 1 4 Postgraduate education April/May 1 Membership in professional 12 5 1 1 3 January and July 2 organizations 12 5 1 1 6 Fees for parent/guardian centers December 1 Depends on the date of updating of 12 5 1 1 8 Child day care services 1 each source

Source: National Statistics Institute (INE)

8.3. Treatment of collected prices

Before calculating the CPI, some exceptional cases (arising either at the time of price collection or because the nature of the product merits special treatment of its prices) should be described. In these cases, the price to include in the calculation must be established. These cases are detailed below.

8.3.1. Recording of prices

The CPI base 2018=100 uses prices in pesos, which is the legal tender. However, trade in some goods and services is expressed in other monetary units. The conversion to pesos uses the following criteria: a) a) Goods and services expressed in UF, UTM, or values indexed to the CPI: these values are converted into pesos in the equivalent value of exchange rate on the fifteenth of each month or the following working day, if the fifteenth is a public holiday. Examples of services valued in UF are monthly fees for educational services and commissions for banks and trading houses. An example of a service valued in UTM are payments for garbage collection service. b) b) Goods and services valued in dollars: these values are converted into pesos according to the value of the dollar that the establishment reports when the price is collected81. If this information is not available in the establishment, then the value of the dollar observed on the fifteenth day is used (or the following working day, if the fifteenth is a public holiday). International airline tickets, international tourist packages, and hotel accommodations are examples of this type of valuation.

8.3.2. Treatment of taxes and subsidies in the price

The data collected for the calculation of the CPI use the prices of actual transactions. They thus include indirect taxes paid by resident households of the nation. Because consumption or specific taxes (such as VAT and specific taxes82) are levied on household consumption, the prices used in the CPI calculation should take them into account. The same does not apply to taxes on income, property, and use of a good or asset (such as taxes on real estate; enrollment in the registry of motor vehicles, boats, or aircraft; and vehicle registration certificates), which are excluded from the CPI because they are levied on the generation and use of an asset but not on consumption. Subsidies are included in the collection of prices provided they are non-discriminatory (i.e., any consumer or person can have access to the subsidy without any restriction, whether from their economic condition or for any other reason) and are applied directly to the price. Thus, all discriminatory subsidies are excluded.

8.3.3. Exceptional situations in the transaction price

The governing principle of the collection of prices of the CPI is that the prices paid by a consumer to purchase a good or service must be recorded at the time the price is collected. However, the following exceptions to this principle occur: . For a product that will be consumed in the future (future price), the price used is the one observed at the source, for example, for airline tickets or tourist packages that are purchased in advance.

. For a product that was consumed in a period prior to the collection of information, the price used is the one observed. For example, the price of the product co-ownership

81 The procedure is applicable for any valuation of the good or service in foreign currency. In this case, the price variation includes the variation of the exchange rate of the peso with respect to the foreign currency. 82 Examples of specific taxes include the tax on tobacco, the specific tax on fuels, the stamps and seals tax, and the tax on alcohol.

expenses is the amount that the co-owners of a condominium must pay for services provided in the previous month.

At the time of data collection in an establishment, the enumerator may find that the price has changed because of a discount or promotion, or simply because the variety, as indicated in the basket specification, is not available. For the purposes of the CPI, prices paid in liquidation sales of items or products that are old, damaged, defective, or deteriorated by storage should not be included, except when they constitute a permanent and generalized feature of actual market conditions. For stock-clearing sales83, several relevant factors must be considered. Although in principle these clearance-sale prices are not collected, as indicated in OIT et al (2006)84, before its designation as a price from a stock-clearing sale, it must be confirmed that the price is for the clearance of an item from the inventory and is offered at a discount. Sometimes, the inventory is continuously sold at a sales price, or it is promoted as a special offer or even as a clearance price, but it is nevertheless sold at the same price throughout the year. In these cases, the prices should not be considered as prices of stock-clearing sales. Instead, they should be considered as normal prices, and thus they should be collected85. For special sales of the last units of a given variety or of damaged, defective, or deteriorated products (for example, because they have been on display), or in the case of food that is no longer fresh or are about to cease to be fresh86, the prices should not be recorded for use in the calculation of the CPI. These prices are omitted because the quality of the associated goods and services is neither equal nor comparable to that of the units whose prices were collected in previous periods and because these products are not likely to be available in the future87. On the other hand, discount prices and special offers should be registered when they are inclusive, and the items are normally available. For exceptional situations of price discounts, the following general principles must be followed if these prices are to be incorporated into the calculation of the CPI: a) Discounts must be applicable to the individual purchase of a good or service. b) They must affect the unit or units of the variety included in the CPI basket. c) They must be available to all potential consumers without being linked to special conditions (i.e., they must be non-discriminatory88). d) They must be known to the purchasers at the time of the purchase. e) They must be clearly identified (published) in a visible place or places, in such a way that the enumerator does not have to resort to his personal knowledge at the moment in which the discount is applicable.

83 A stock-clearing sale is a sale in which an establishment offers a large discount. It is normally associated with the end of the season, bankruptcy, remodeling, or relocation of the establishment, among other reasons. 84 OIT et al. (2006), párrafo 6.83, p. 110. 85 In the case of clothing and footwear (where stock-clearing sales are more frequent), a procedure defines the criteria that enumerators must use to discriminate between a normal price and clearance-sale price. Some of the elements taken into account are whether the garments are in their usual packaging, whether they are on the shelves where they are usually marketed or in other receptacles, and the availability of the most commonly used sizes. 86 UNECE et al. (2009), párrafo 6.19, p. 60. 87 OIT et al. (2006), párrafo 6.83, p. 110. 88 For example, special discounts associated with a particular form of payment (such as a credit card of an associated store) must not be included.

8.3.4. Treatment of discounted or promotional prices

In exceptional cases where sales and promotions modify the price at which varieties are sold (for example, because of commercialization strategies), a transitory reduction in the price of the variety is observed. Other cases may be observed in which temporary or permanent changes are made in the terms of sale of the variety or in which a gift (another variety) is received with the purchased variety. In these cases, the sale price is collected if and only if the variety is explicitly presented and is of a universal character89. If the sales price is to be collected, its registration, for the purposes of the CPI, varies with the specific situation. Normally, the price to be collected falls under one of the following four situations90:

1) Sale or promotion: is commercialization policy of one or several establishments in which the price reduction of the variety is publicized in anticipation of a particular situation or event, for example, Mother’s Day, Children’s Day, and, in the case of automobiles, the September bonus.

퐶푎푙푐푢푙푎푡푖표푛 푝푟푖푐푒 = 푂푏푠푒푟푣푒푑 푝푟푖푐푒 = 푆푎푙푒푠 푝푟푖푐푒

2) Variety plus a gift valued at the establishment: the manufacturer or establishment that sells the variety provides a gift of another variety (distinct from the variety whose price is being collected) to those who purchase the original variety, in an establishment where both varieties can be purchased separately91. From the perspective of the index, the calculation price must not include the price of the variety received as a gift. Therefore, to obtain the calculation price, 50% of the value of the gift is discounted from the observed price.

퐶푎푙푐푢푙푎푡푖표푛 푝푟푖푐푒 = 푂푏푠푒푟푣푒푑 푝푟푖푐푒 − 0.5 ∗ 퐺푖푓푡 푝푟푖푐푒

Typical examples of this commercialization policy include shampoo to which conditioner is added as a gift and a package of noodles to which tomato sauce is added. The gift will always be of a variety of equal or lesser value.

3) Variety with a change in contents: the manufacturer or establishment modifies the contents or presentation format of the variety, and thus the enumerator observes in the establishment a field unit that is different from the specifications of the basket (basket unit92). In this case, the price used in the calculation is obtained as the unit of measurement of the basket divided by the field unit of the new presentation.

89 The sale price must be of a universal character. Therefore, it must be available to all types of consumer, regardless of their characteristics, the mode of payment, or the number of units purchased. 90 The calculation price is the price used in the calculation of the CPI base 2018=100 after the effect of sales and promotions has been eliminated. The observed price is the price that the enumerator registers in the Price Collection Form. On the other hand, the sales price is the price whose level has temporarily been reduced in one or more establishments as a result of a commercialization strategy that seeks to increase sales of a variety. The variety will probably be sold later at the previous price (without discount) in the period following price collection. Normally, the observed price will be the sales price. 91 Sales prices are only collected for those that include two varieties. Thus, the price of promotional packs of three or more distinct varieties are not collected. 92 A basket unit is the defined quantity of a variety whose price must be collected in an establishment and whose price is used as a reference in the calculation of the index.

퐵푎푠푘푒푡 푢푛푖푡 퐶푎푙푐푢푙푎푡푖표푛 푝푟푖푐푒푡 = ∗ 푂푏푠푒푟푣푒푑 푝푟푖푐푒푡 퐹푖푒푙푑 푢푛푖푡푡 Where t is the current month. Examples include changes in the container of the variety and its contents (whether or not in the same packaging), sales tied to more than one unit of the same variety, and the changes in the number of units of the variety sold in packages.

4) Variety with a price discount expressed as a percentage: in the previous cases, the manufacturer or producer sought to promote his products by modifying the unit of measurement of the variety (changes in presentation). In this case, it is assumed that the establishment implements the discount in the price of the variety, which is expressed as a percentage and can be identified by all potential customers. For the purposes of the index, the calculation is obtained in the following manner: 100 − % 푑푖푠푐표푢푛푡 퐶푎푙푐푢푙푎푡푖표푛 푝푟푖푐푒 = ( ) ∗ 푂푏푠푒푟푣푒푑 푝푟푖푐푒 100

A typical example is a sale in which the price of a variety has been reduced by a given percentage, regardless of the mode of payment.

8.4. Products according to treatment of price

Prices of the CPI basket have different treatments, as is consistent with market prices. The following general cases can be distinguished: . Products whose price does not require special treatment or calculation. . Products whose price requires a special calculation (the use of standard bill or weighted sum of components). . Products whose price requires special treatment (the use of weighting at a level lower than that of product and the use of panels to measure price change).

8.4.1. Products that require no special treatment or calculation

This is the most common situation in the index and applies to most of the products of the basket. When prices are collected only once per month and the products do not require special calculation or treatment (topics discussed later in this chapter), the price, as collected by the enumerator at the establishment, is entered into the CPI calculation system and then validated. If, during a month, more than one price is collected in the establishment (i.e., the price is collected either weekly or every two weeks), the average of these prices is used in the calculation. An example is fruits and vegetables, whose prices are collected weekly at street markets. In this case, the street markets are considered as a single establishment, and the price used in calculation is the average of each collection, as shown below: 푛푗 푝 푃푀(푒) = ∑ 푗,푒 푡,푣 푛푗 푗=1 Where PM is the monthly price in establishment e, associated with variety v, and nj is the number of prices collected in month t for each respective establishment.

8.4.2. Products that require special treatment (use of a standard bill)

Special calculations are all measurements that seek to obtain a price used in the calculation of the CPI but that do not result from a direct observation at the source. These measurements require a previously determined ad hoc treatment. In some cases, the treatment applied to establish the price of the service involves either the creation of a standard bill93 or the use of a sum of components. Both treatments, however, share certain characteristics. An example of the use of standard bills is for drinking water, which has fixed and variable charges, both of which are measured in cubic meters of water. An example of the use of the sum of components is for educational services, whose price is the aggregation of multiple payments, including tuition, enrollment fees, and registration fees. In the first place, some special calculations have a weighting below the level of product (i.e., at the level of variety) in order to better represent market dynamics. The variety is weighted in consideration of the heterogeneous nature (in terms of market share) of the companies that determine its price. Therefore, these companies have a greatly varying impact on household expenditure because each company reaches different segments of consumers. For the construction of the weights to be applied below the level of product, structural surveys must be conducted of the providers of each service, and/or alternative sources must be used, such as administrative registers. Structural surveys, from which data are obtained for the calculation of weights, are conducted once a year at a determined period for all enterprises, with the aim of calculating the market shares of each establishment. This information is contrasted with administrative records, when appropriate, in order to review the data for consistency. In addition, structural surveys are used to determine which companies to include in the later processes of monthly price collection in the year of validity of the survey. Thus, prices of varieties are collected as provided by the companies that together have a market share in excess of 85% of the industry. Figure 3, below, shows the general structure of the products analyzed in the following section.

93 The standard bill is the value that a household must pay for a service consumed and that forms a set of n optional and obligatory items.

Figure 3. Schema of aggregation for products with special calculations

Source: National Statistics Institute (INE)

8.4.2.1. Drinking water

The price index of the product drinking water (code 4.3.1.1.1) measures the price variation of this service as distributed to residential clients in the zones covered by the CPI. To determine the levels of consumption by tariff zone and by company, in addition to the participation of companies in the sector, information is requested each year from the Superintendency of Sanitation Services (SISS)94. The variation of a standard bill, which is defined for each of the companies operating in regional capitals and their conurbations, is monitored each month. The required information is requested from every company included in the sample. The valuation of the standard bill includes the following95: . Fixed Charge ($): is a payment of equal value made by all consumers regardless of consumption. The fixed charge is for administrative expenses and is not for services that the company provides.

94 The processes used to set fees in this sector are undertaken every five years, for which SISS conducts studies of each company and sets distribution fees for the next five years. These fees cannot be modified except when a company makes an appeal before SISS because of changes in the associated costs of distribution. 95 These definitions were taken from: http://www.siss.cl/articles-4799_recurso_1.pdf

. Peak variable charge ($/m3): is the payment associated with a greater demand for drinking water. In most cases, it is the rate from 1 December to 31 March of each year. . Non-peak variable charge ($/m3): refers to the rates in effect from 1 April to 30 November of each year96. . Variable overconsumption charge ($/m3): is the level of consumption above which the overconsumption rate is applied. It is calculated for the period between 1 July and 30 November of each year. . Variable charge for sewerage service: is the charge for the removal of sewage from buildings or properties. It is proportional to the consumption of drinking water. . Variable charge for wastewater treatment: is the charge for the treatment service whose objective is to ensure that the collected wastewater complies with current regulations. This charge may appear as a charge added to the variable sewerage charge. Consumers are divided into two groups: medium consumption and high consumption. In addition, standard bills distinguish between peak and non-peak periods, and are valued at the rates in effect on the fifteenth of each month97. The calculation of the product index uses a geometric mean of the monthly variations of the standard bill (valuation of the standard bill in month 푡 compared with the valuation of the standard account in month 푡 − 1) weighted by the market share of the companies that distribute drinking water in each of the regional capitals and conurbation zones.

8.4.2.2. Co-ownership expenses

The variation in the price of co-ownership expenses (code 4.3.3.2.1) is obtained from the sum of three components of the monthly receipts from the co-owners, namely staff salaries, maintenance, and basic services. This information comes from a sample of condominiums (made up of houses and apartments). In addition, property managers are directly consulted about the total expenditure for remunerations and maintenance. For basic services, the variations are obtained from information found in administrative records. These components provide the basic structure of aggregation with weights at this level, thus enabling the precise measurement of short-term variation. In the component basic service, which was not included in the CPI base 2013=100, payments for services of the common utilities of electricity, water, and gas have been incorporated by using price information from other products of the CPI98. This price information comes from administrative records. Because the information requested from condominiums occurs at the time when the co-owners are billed and not at the time when the condominium pays for the service, there is a one-month lag, that is, the CPI for month 푡 includes the payments for the co-ownership expenses of month (푡 − 1).

8.4.2.3. Electricity

The price index of the product electricity (code 4.4.1.1.1.1) measures the price variation as

96 No distinction exists between peak and non-peak periods in the case of sanitation service companies that have concessions in the regions from Los Lagos to Magallanes. 97 These items are associated with a consumption structure expressed in cubic meters. 98 These products are electricity (code 4.4.1.1.1), drinking water (code 4.3.1.1.1), and network gas (code 4.4.2.1.1).

distributed to residential customers (BT1 tariff) within the regulated market of electricity distribution in Chile, according to the definition of this market99.

The monthly price variations are obtained from the valuation of a standard bill that includes the fixed charge ($), the rental of the meter ($, adjusted by the proportion of clients who rent them), and the variable costs directly linked to monthly consumption (the charge for base energy ($/kWh) and the charge for use of the trunking system ($/kWh).

For each electric company included in the sample, six consumption brackets are valued monthly as established in Law No. 20,928 on Residential Tariff Equity (ETR)100, namely, brackets of 200, 210, 220, 230, 240, and 250 kWh per month. Then, for each company, the standard bills for each consumption level are attached to the number of customers in each bracket. The number of clients per bracket is available on the website of the National Electricity Commission (CNE) 101.

The calculation of the CPI uses the weighted geometric average of the variations of the standard bills (valuation of the standard bill of month 푡 compared to month 푡 − 1) of the companies that provide electricity service in the regional capitals and their conurbation zones. The weighting of each company proportional to their market share and is constructed with the information available on the CNE website. The rates at which the standard bills are valued are those in force on the fifteenth of each month. Reassessments of electricity tariffs102 are not included because they represent a change in the level of household income and not a change in the price of the service103.

8.4.2.4. Network gas

The price index of network gas (code 4.4.2.1.1) measures the price variation of this product as distributed to residential customers who have special facilities (pipelines, meters, etc.) to consume gas through a system of pipelines104.

99 According to its definition, “the supply of electricity to end users whose connected power is less than or equal to 5,000 kW is considered to be a sector where the characteristics of the market are of a natural monopoly and, therefore, the Law establishes that they are subject to price regulation". For more details, visit the following link: https://www.cne.cl/tarificacion/electrica/ 100 See https://www.leychile.cl/Navegar?idNorma=1091871&buscar=equidad+tarifaria+residencial 101 For residential customers, the BT1a rate is the only option. For further details on these rates, visit the following link: https://www.cne.cl/wp-content/uploads/2015/07/2013_04_02-Decrero-N1T-Tarifas- dedistribuci%C3%B3n-DO.pdf 102 The reassessments are an adjustment to the final price of energy (already collected from clients) where the original differences are calculated so that clients are retroactively credited or charged in their monthly bills through their distribution-company account. The manner of adjustment and application of reassessments are defined by the Superintendency of Electricity and Fuels (SEC). For more information, see: http://www.chilectra.cl/wps/wcm/connect/ngchl/ChilectraCl/Hogar2/CuentaConsu/Informacion+Reglamentari a/ 103 Supplements were published on the application of the mechanism of residential tariff equity to the calculation of the CPI (20 October 2017) and updating of the formula for the construction of the standard bill for the product electricity (2 May 2018). Both supplements can be found on INE’s website at: http://www.ine.cl/estad%C3%ADsticas/precios/ipc?categoria=Base%20anual%202013=100 104 The market for gas distributed by pipelines is private because, although it is not a market regulated in price like the market for electricity, there is a regulation of the profits that companies can make, which may not exceed 11% per year. In the event that this occurs in clients that consume less than 100 gigajoules, the Free Competition Tribunal

The monthly price variation is obtained by using a standard bill that consists of a fixed charge, variable consumption charges, and charges for additional services. The average consumption of a representative household is valued for each of the distribution companies existing in the geographical coverage areas of the CPI. The index of the product network gas is obtained by using the geometric average of the standard bills weighted by the company's relative market share. Market share is determined annually with information from structural surveys of companies regarding their income.

8.4.2.5. Liquefied gas

Liquefied petroleum gas (LPG) (code 4.4.2.2.1) is a gaseous fuel widely used throughout the world and is the most widely used residential fuel in Chile. It consists of a mixture of light hydrocarbons consisting mainly of propane and butane105. LPG is sold in 5-, 11-, 15- and 45- kilogram cylinders106 but can also be supplied in bulk. For the purposes of the CPI, sale of LPG cylinders does not require special calculation or special treatment because the prices of 15 kg cylinders (both current and catalytic) are collected monthly at the outlet of the distributors and sub-distributors. Bulk liquefied gas, however, requires a special calculation that uses a standard bill that includes a fixed charge and a variable charge for the level of consumption. Standard bills of companies are aggregated by a weighted geometric mean. The weights are constructed from the information on sales and consumption of clients provided by companies that distribute liquefied gas to residential clients of the regional capitals and their conurbation zones.

8.4.2.6. Taxi transportation services

For the product taxi transportation services (code 7.3.1.1.2), the price variation of a service for a ride of 3,000 meters is collected.

The price paid by the consumer consists of two components: the flag-drop fee (the fee for using the service) and the value for each 200 meters traveled until the end of a typical journey. This price is collected directly from taxis.

In the Metropolitan Region, where fares are regulated, information is requested twice per year (in January and July) from the Regional Ministerial Secretariat (SEREMI) for Transportation. The calculation of the index distinguishes between basic and executive taxis; thus, price variations are weighted by the relative weight of both types of service.

The calculation of the index is obtained by a geometric mean of the price variations at each source.

(TLC) may request tariff regulation from the Ministry of Energy. Another important point in the regulation of this sector is that two customers with similar characteristics should not pay different tariffs. Additionally, because of the high costs of entry for installations, logistics, and excavations to install pipelines, among other reasons, the companies in this sector act as a natural monopoly because entry costs are very high and because two different companies cannot use the same pipeline for distribution. 105 http://www.gascomagallanes.cl/gas_licuado.html 106 https://www.lipigas.cl/hogar/gas-licuado/cilindro

8.4.2.7. Air transportation services

The product air transportation services (code 7.3.2.1.1) is measured by the price variation of the most representative destinations at both a national and an international level. For this purpose, prices are collected from the air transportation companies with the greatest market share. The basket of destinations is constructed with information from the statistics of the Civil Aviation Authority (JAC). It includes destinations that have the largest annual number of passengers and that represent 85% or more of the total number of flights completed. These factors determine not only which destinations are used in the basket but also which national and international airlines. The price or value of the airline ticket consists of the sum of two components: the base fare plus the value of the boarding fee. Both components of international destinations are expressed in dollars, but the company transforms the value into pesos at the time of purchase. The prices are collected one month prior to departure for national destinations and two months prior for international destinations. Following the acquisitions approach, prices are included in the calculation of the CPI in the same month in which they are collected. The product index of air transportation services is obtained by using a weighted geometric average of the monthly variations in the value of airline tickets, where the weights reflect the market share of air transportation companies for national and international destinations, as well as the relative importance of national and international destinations.

8.4.2.8. Mobile telephone services

The price of mobile telephone service (code 8.2.1.1.4) is taken from the commercially available plans107 with the largest number of customers in the month prior to calculation, and a standard bill is created that includes calls during normal, reduced, and night hours, in addition to text messaging service and multimedia messaging service (for the postpaid modality only). The monthly development of the price of mobile telephone services is obtained by a geometric mean weighted by type of service within each company (prepaid and postpaid) and by market share of the companies in the sector. Within each modality, standard bills with a weighted geometric mean are aggregated first.

8.4.2.9. Fixed-line telephone services

For this product (code 8.2.1.1.5), standard bills are constructed for the contraction of commercially available postpaid plans of each company, as well as for the prepaid modality. For the prepaid modality, the price of an established amount of credit is collected, and the number of minutes, determined by average consumption, is valued. The standard bill for the postpaid modality includes the value of the contracted plan, in addition to an average cost related to international long-distance calls and an average cost for calls to mobile phones. Although the expenditure used for international long-distance calls is an average that includes all destinations (valued for each company in the calculation), the average expenditure on calls to mobile phones varies by company. The plans with the highest percentage of clients are used.

107 These are plans that are valid and available for consumption at the moment of price collection.

For the purpose of calculating the CPI, elementary indices are aggregated by using a geometric mean weighted by type of service within each company (prepaid and postpaid) and the market share of the companies in the sector. Within the standard bill, the most frequent uses of minutes are defined for each type of call. These data are obtained from the structural survey of telecommunications services, which is conducted by INE during the second half of each year and includes the principal companies of the sector.

8.4.2.10. Products associated with educational services

Education services are divided into six groups: pre-primary and primary education; secondary education; post-secondary, non-tertiary education; tertiary education; and education not definable by level (e.g., language and training courses, among others); and postgraduate education. The price of education services is obtained by using a sum of components, which includes tuition, the registration fee, and, when applicable, the enrollment fee. A geometric mean is used to obtain the product index. The price information of each of the items is obtained directly from the establishments that form part of the sample, through a survey, which, in the case of pre-primary, primary, secondary, tertiary, and postgraduate education, is collected once a year. For prices charged in UF, UTM, or dollars, the prices are valued in pesos on 15 December for tuition and the enrollment fee and on 15 March for the registration fee. The calculation of the CPI uses the price of the service only for the months in which it is offered (i.e., from March to December of each year), following the standard practice of reflecting price variations at the beginning of the academic year (March). These same prices are carried forward in the intervening months108. This methodology follows the recommendations of the System of National Accounts of 2008 (SNA 2008) for the treatment of services that are provided on a continuous basis. The SNA 2008 indicates that these services must be recorded when they are provided and throughout the contract period109.

8.4.2.11. Financial expenditures

This product (code 12.4.1.1.1) measures the direct costs associated with financial products that do not depend on the interest rate, such as administrative costs (costs of opening and maintaining a current account), operational costs (in the case of mortgage loans), compulsory insurance, the stamps and seals tax, and other operating costs. Each of the mandatory components is added each month to obtain the costs of consumer credit, mortgage loans, lines of credit, and credit cards, as well as the costs of maintaining a current account. The calculation of the price of the product financial expenditures includes the commissions of banks and financial institutions110 as well as commissions of trading houses associated with consumer credit. A geometric mean, weighted by the importance of each of the reporting companies in the industry, is used to aggregate the varieties111.

108 UNECE et al. (2009), p.137. 109 CE et al. (2016), párrafos 3.169-3.170, p. 65. 110 This includes opening a current account and a line of credit, as well as credit card transactions, the stamps and seals tax associated with a current account (credit line and credit card), consumer credit, and mortgage loans. 111 The companies are banks and financial institutions with the greatest market share.

8.4.2.12. Child day care services

The product child day care services (code 12.5.1.1.8) uses a sum of components, which includes a registration fee and an annual fee for the care of children under two years of age, for one full day and for a half day. Because prices do not vary every month, the source is only consulted in the month in which it declares that a change in prices has occurred. In the intervening months, the price is carried forward. The product index is obtained as a geometric mean of the relative prices of each of the sources.

8.4.3. Products that require special treatment (use of a weighting below the level of product or use of panels)

The products presented in this section are those that, within their aggregation structure, involve special treatment in order to measure the change in prices. This treatment involves either the use of weighting below the level of product or of panels.

8.4.3.1. Rents

Information for the product rents (code 4.1.1.1.1) is collected through direct household surveys. Effective rents do not include the product imputed rents in the CPI basket112. The sample of dwellings used for the price collection of rents is divided into four homogeneous panels in order to avoid the exhaustion of informants with monthly inquiries. Thus, a dwelling is surveyed for the value of rents six times per the year. Dwellings are surveyed for the price paid for renting the property in the last month for which rent was due. The price does not include expenditures apart from the contract or lease agreement. Below, Figure 4 shows the price collection and calculation of the index according to panel. Figure 4. Price collection for the product rents

Source: National Statistics Institute (INE)

112 The exclusion of imputed rents is consistent with the approach and conceptual framework of the CPI 2018=100, which excludes expenditures for owner-occupied dwellings.

The monthly variation of the price for rents of the dwelling (houses and apartments) is obtained by using a self-weighted geometric mean of the price variations of rents reported by informants, according to the panel to which they belong and to the month being measured in the calculation. In panel one, for example, the price relative is used for the calculation of the CPI in February, June, and October.

8.4.3.2. Garbage collection service

This product (code 4.3.2.1.1) measures the minimum value that a household must pay for garbage collection. This value is the price charged to dwellings at different levels of tax assessment for non-agricultural land of residential use. If the tax assessment of a sample dwelling changes, another level should be selected and the minimum value charged. The most representative communes (according to expenditure for this product) are selected from those within the coverage of the CPI. Because charges for garbage collection service are included in the payment of the taxes, the information is requested from the General Treasury of the Republic for a sample of communes twice per year: the first and second payments on 15 April and the third and fourth payments on 15 September. The monthly variation of the expenditure on this product is calculated by a geometric mean weighted by the relative importance of the expenditure of each of the communes in the sample.

8.4.3.3. Domestic service

In the CPI base 2018, the product domestic service (code 5.6.2.1.1) is defined as multiple tasks (household cleaning, washing, ironing, childcare, and cooking, among others) performed by live-in and live-out workers, both on a full-time and a part-time basis. A sample of households is surveyed every month about the amount paid in the previous month, the number of days and hours worked, and the payment regime (daily, weekly, or monthly), in addition to full-time or part-time status and the type of activity of the worker. With this information, a sum of components is constructed. The methodological treatment for domestic service is similar to that used for the sample of rented dwellings; four panels are used whose prices are observed every two months. The second month (the month in which there is a price relative) is the month used in the calculation of the CPI. A monthly survey of households reporting expenditure on domestic service is conducted to monitor the price. To obtain the monthly variation in expenditure on this product, the geometric mean is calculated with the variations in payments for this service made by each of the informants of the panel.

8.4.3.4. Products associated with health services

Health-related services belong to groups 2 and 3 (outpatient services and hospital services, respectively)113 of division 6, health. Because of the subsidiary nature of the sector, the prices paid by users must include both the establishment of the provider, which determines the prices for each service, and the coverage

113 The products discussed in this section are medical appointments, procedures and surgeries for outpatients, imaging and radiology, clinical laboratory tests, services of other health professionals, and hospitalization services.

modality, whether FONASA (National Health Fund), ISAPRE (Private Healthcare Institutions), or other private healthcare insurers114. These factors must be considered when observing the differentiation in the final price to be paid by consumers. To obtain the price of health care services, final prices by coverage modality are collected every month for each relevant variety in all facilities used in the calculation of the index, including public and private hospitals and clinics. Because health services are not interchangeable but instead result from particular conditions, the variations in their prices are aggregated each month by coverage modality, using an arithmetic mean. By means of an annual structural survey, weights below the level of product are obtained by considering, first, the participation of the coverage modality in the income of the establishments (variety-establishment) and, later, the market share of the establishments over the total of the system (variety).

8.4.3.5. Multimode transportation services

For this product (code 7.3.3.1.1), enumerators observe the price variation of the integrated transport system of the Metropolitan region, or Transantiago, which has been operating since February 2007. Transantiago consists of branch-route buses, trunk-route buses, and underground trains. Underground trains have fares differentiated by time range (high, medium, and low). The price used in the calculation is the value of an adult fare for all possible fares of trips made within 120 minutes (including transfers) on the fifteenth of each month. The index is constructed by using a geometric mean of the variations of all possible fares, which are weighted by the frequency of use of the different time ranges.

8.4.3.6. Toll services

This variation in the price of this product (code 7.2.4.2.1) is taken from the main toll plazas and tollgates on the motorways of the nation. The selection of the basket of this product is based on INE’s transport survey, which observes the number of cars that pass through each of these plazas and gates every month. The toll plazas and tollgates with the highest vehicle traffic are selected until reaching 85% of the total number of vehicles transiting through them during a consecutive year. Prices are collected from the official web pages of the toll concessionaires. The price variations are then aggregated according to their relative weight (below the level of product) and calculated by the frequency with which vehicles pass through each toll plaza or tollgate.

8.4.3.7. Internet connection services

This service (code 8.2.1.1.1) is contracted separately from bundled services (packs). Prices for commercially available plans with the greatest number of clients are monitored each month. A geometric mean of price variations, weighted by the market share of companies in the sector, is used to calculate the product index.

114 According to the National Health Fund, in 2017, the participation in each modality of coverage was as follows: 76.2% used public health insurance (FONASA), 18.6% used ISAPRE, and 5.3% used other private insurers or were insured through the armed forces.

8.4.3.8. Mobile broadband services

This service (code 8.2.1.1.2) is also contracted separately from bundled services (packs). Enumerators monitor prices of commercially available plans with the largest number of customers. The index is calculated by a geometric mean, which is weighted by the participation of each type of service115 within each company and by the market share of the company in the sector.

8.4.3.9. Bundled telecommunication services

The prices collected monthly for this product (code 8.2.1.1.3) are commercially available plans (double and triple service packs) with the greatest number of customers in each company of the sample. For the calculation of the CPI, the prices are aggregated by a geometric mean weighted by the types of services within each company116 and by the market share of the companies in the sector.

8.4.3.10. Paid residential television services

These services (code 9.3.2.3.1) are contracted separately from bundled services. The commercially available plans with the greatest number of customers are monitored for price in the most representative companies in the market. The product index is obtained by using a geometric mean weighted by the participation of each type of service within each company (contract plans) and by the market share of the companies in the sector.

8.4.3.11. Package tours

The variation in the price of the package tours117 (code 9.5.1.1.1) measures national and international package tours. The most frequent destinations and services offered by the most important travel agencies in the industry are determined annually by a structural survey of travel agencies concerning destinations, services, and their market share. Destinations and agencies with the greatest market share (i.e., those that are most representative and most frequent) are selected until a level 85% of total travel by package tour and of agencies with the greatest market share is reached. With this information, weights can be constructed for the different levels used in the calculation. With these weights, price variations are aggregated from the variety-establishment level to the product level. Thus, to obtain the subcomponent (destinations that form part of the basket), the price variations of the various travel agencies of the sample that offer the selected destination are aggregated.

115 These services are prepaid and postpaid mobile broadband services. 116 These types are double packs (internet and fixed-telephone services, internet and paid television, and paid television and fixed-telephone services) and triple packs (internet, fixed-telephone services, and paid television). 117 Package tours are offered in a single format in which travel agencies make all the necessary arrangements. They normally includes the following services: transport, accommodation, and food. It is not possible to establish a separate price of each of the services offered in a package tour.

For domestic tours of one day, a self-weighted geometric mean is used, but for tours lasting more than one day (domestic or international destinations), a weighted geometric mean is used (i.e., each travel agency has a weight proportional to its market share). The collection of prices differs according to the type of destination and service. For international destinations, prices are collected two months before the date of the trip, and, for tours of domestic destinations of more than one day, prices are collected one month before the trip. For tours of domestic destinations of one day, the price is collected in the same month as the tour118. In order to control for temporary effects associated with price variations of the product, the base 2018=100 has initiated a calendar of seasons for each destination. Thus, for example, packages offered in high season will not be compared with those offered in low season. Based on information provided by the principal travel agencies in the market, the calendar will be adjusted each year119.

Lastly, because of the acquisitions approached used in the CPI, the price used in the calculation is the price collected during the same month. Thus, for example, international package tours in March are included in the calculation for January, when the price was collected.

8.4.3.12. Insurance

The product (code 12.3.1.1.1) consists of insurance associated with personal transport (automobile insurance) and financial instruments (insurance for loans from banking institutions and trading houses and for institutional loans). In the case of automobile insurance of light vehicles for private use, premiums with and without deductibles are valued on the fifteenth of each month. For quality control, an average client profile has been created with characteristics that do not change over time. Among the most important characteristics of the profile are the type of automobile and its make and model, as well as the age of the policyholder (30 years) and his status as being without any registered claims. The variety-establishments are aggregated by using a geometric mean, while the aggregation below the level of product (variety) uses a geometric mean weighted by the market share of the most relevant insurance companies in the sector, i.e., those that account for 85% of market share in terms of the direct premium. For insurance associated with financial instruments, and in particular for loans, enumerators monitor compulsory insurance, such as payment protection insurance. Varieties are aggregated following the same process as for automobile insurance.

118 On 31 January 2017, INE published a supplement on the methodological changes that affect the calculation of the product package tours. This supplement can be found on INE’s website at: http://www.ine.cl/estad%C3%ADsticas/precios/ipc?categoria=Base%20anual%202013=100 119 For more information on the product package tours, see INE’s working paper no. 1, Análisis de volatilidad y descomposición de variabilidad del IPC en Chile [Analysis of the volatility and decomposition of the variability of the CPI in Chile], available at http://www.ine.cl/docs/default-source/documentos-de- trabajo/precios/documento-de-trabajo-precios-n1.pdf?sfvrsn=7

Chapter 9. Treatment of missing prices

Missing prices occur because of seasonality, shortages, and the temporary disappearance of a variety in the market. The following sections describe the most common situations that arise when collecting prices and explain the imputation methods used in the calculation of the CPI.

9.1. Prices of missing varieties

There are situations in which price researchers collect the price of a variety that is temporarily or permanently unavailable in the establishment. In general terms, three situations arise in the field that merit explicit treatment: 1) Variety temporarily out of stock in the current period: the variety requested for the basket is not present in the establishment at the time of price collection, but information is available that the variety is still being sold in the establishment. Thus, for the CPI calculation, there is no observed price because the price of the variety to be collected is not available. In these cases, the imputation rules for missing prices apply, as indicated below. 2) Variety permanently unavailable in the establishment: the variety of the basket is no longer sold in the establishment and will not be sold in the future. In this case as well, there is no observed price. Therefore, the missing price is imputed and a replacement of the establishment must be proposed. 3) Variety will be available in the establishment later in the month: there is information that within the month of observation the variety of interest will be replenished. Thus, the enumerator can visit the establishment again in the last scheduled week of collection of the month. If a price is collected during this visit, it is entered into the calculation; otherwise, the missing price is imputed.

9.2. Treatment of missing prices and imputation methods

The procedure for replacing missing prices of a variety is called price imputation. This procedure involves assigning the variation of one or more other varieties similar to the variety for which no price is available.

9.2.1. Treatment of missing prices resulting from unavailability of the variety

Imputation is the last resort when all other means of replacing the missing price have been exhausted. When the price of variety is missing from an establishment, the rules of imputation are the following120:

120 The rules for imputation are applied sequentially, from the elementary aggregate (variety-establishment) to the highest level of aggregation (division).

a) If the quantity of prices collected in the regional capital is sufficiently representative121, the price is imputed with the variation of prices of the same variety in similar establishments122. b) If the minimum level of prices is not available for price imputation from similar establishments, the price is imputed by using the variation of prices of the same variety, but in other types of establishments with sufficient representation in the regional capital. c) If none of the options above is possible, the price is imputed by using the variation in the price of the product (set of varieties) in the region. That is, the price is imputed with the variation of prices of the other varieties of the product to which the variety to be imputed belongs, provided that the replacement varieties meet the criterion of sufficient representation. d) If the previous condition cannot be met, the price is imputed with the price variation of the product in the macro-zone123. For imputation purposes, geographical macro-zones have been defined within which prices can be imputed. e) If the quantity of prices collected for the product in the macro-zone is not sufficiently representative, the price variations of the macro-zones in which these prices meet the criterion of representativity are used, provided that the national representativity meets the established representativity requirements. f) If the above imputation criteria are not met, the price is imputed with the variation of the subclass, class, or division, as appropriate. g) For some unusual cases in which none of the above criteria is met, the carry forward method is used. That is, for the month in which the price of a variety is not available, the last price recorded is repeated (carried forward) until the price is again available. Carry-forward imputation is also used for products whose prices changes infrequently, such as education services.

121 The quantity of price collected must be greater than or equal to 35% of the total number of prices requested in the corresponding type of establishment. 122 There are exceptions to this rule of imputation because, in some cases, the variation of the product is closer to the variation of other products of the same industry than to a set of other products. For example, kerosene is imputed by oil, firewood is imputed by charcoal, living room furniture is imputed by dining room furniture, toilet paper is imputed by napkins and paper towels, and, finally, shampoo and conditioner are imputed by soap. 123 For the CPI, macro-zones enable product prices to be imputed within geographical areas that share similarities and that, therefore, better reflect the price variation of missing products in a regional capital. Although the VIII EPF defines four macro-zones (northern, central, southern, and metropolitan), for purposes of price imputation in the CPI methodology, three macro-zones have been defined for the CPI: the Northern Macro-zone from the region of Arica y Parinacota to the region of Coquimbo; the Central Macro-zone from the region of Valparaíso to the region of Biobío, including the Metropolitan Region and the region of Ñuble; and the Southern Macro-zone from the region of Araucanía to the region of Magallanes y Antártica Chilena, including the region of Los Ríos. The process of imputation must be distinguished from the process of aggregation — in the latter process, there is no level of aggregation by macro-zone.

9.2.2. Treatment of missing prices of seasonal products

Seasonal products124 are those that are not available in certain seasons (months) of the year. The prices of seasonal products are synchronized with the season or time of year125. Divisions such as food and non-alcoholic beverages and clothing and footwear are strongly linked to the phenomenon of seasonality. This characteristic can most noticeably be observed in clothing and footwear, in which there are two seasons: spring-summer and autumn-winter. In the basket, two composite products are constructed for fresh fruit and vegetables (one is seasonal and the other consists of fruits available throughout the year). The former encompasses all the seasonal products available at different times throughout the year. The seasonal products of clothing and footwear include coats for women, coats for men, coats for children, seasonal footwear for women, blouses and T-shirts for women, shirts and T-shirts for men, shirts and T-shirts for children, trousers and skirts for women, trousers and shorts for men, and trousers, skirts, and dresses for children. These varieties are defined according to two seasons: spring-summer and autumn-winter. The following table shows examples of seasonal products.

Table 9. Examples of seasonal products

Product Variety Basket weighting (%)

Cherimoyas, plums, apricots, strawberries, cherries, kiwis, mangoes, melons, nectarines, Seasonal fruit sweet cucumbers, pineapples, grapefruit, 0.39180 watermelon, cactus pears, and grapes

Artichokes, beets, broccoli, cauliflower, fresh Seasonal vegetables corn, asparagus, fava beans, cucumbers, green 0.30569 beans, and common beans

Autumn-winter sweaters for men, spring- summer sweaters for men, autumn-winter Coats for men/(a) 0.17216 jackets for men, and spring-summer jackets for men

Note: (a) The weightings of coats for women and coats for children are 0.21% and 0.06%, respectively. Source: National Statistics Institute (INE)

In periods when a type of fresh fruit or vegetable disappears, as well as when seasonal clothing is no longer available (i.e., when it is outside its period of seasonality), prices are imputed by using the carry-forward method of the last price recorded. When the product is within its period of seasonality, the imputation follows the rules indicated in the previous section (9.2.1).

124 OIT et al. (2006), p. 16. 125 Nevertheless, it is possible to find these products in a smaller number of establishments throughout the year, but, because of the small number available, they are not considered representative for the purposes of the CPI.

9.2.3. Treatment of missing prices of temporary product

Temporary products are those that are not universally available all year round or are products whose consumption is concentrated in a certain period of the year. The origin of the temporality may be climatic, institutional126, or commercial127.

The price collection of these products has a fixed beginning and end, for which an annual calendar has been created that establishes the month when the prices are to be collected. The following table shows examples of temporary products.

Table 10. Examples of temporary products

Reason for D G C SC P Product description Date of collection temporariness

Garments and footwear (autumn- 3 0 0 0 0 January to July Climatic winter) Garments and footwear (spring- 3 0 0 0 0 July to January Climatic summer) 3 1 2 4 1 School uniforms and sportswear January to February Institutional Sandals (July to January) 3 2 1 3 2 Footwear for children and boots (January to Commercial July) 4 3 2 1 1 Garbage collection service April and September Institutional 5 3 1 1 3 Household heating appliances April to August Climatic 7 3 1 1 3 School bus transportation services March to August Commercial 9 2 1 1 1 Toys April to December Commercial December, January, 9 2 2 1 2 Camping equipment Climatic February 9 4 1 1 1 Textbooks February to march Commercial 10 1 1 1 1 Pre-primary education services December Institutional 10 1 1 1 2 Kindergarten education services December Institutional First phase of primary education 10 1 1 1 3 December Institutional (first to fourth grade) Second phase of primary 10 1 1 1 4 December Institutional education (fifth to eighth grade) 10 2 1 1 1 Secondary education services December Institutional 10 3 1 1 1 University preparation services February Institutional 10 4 1 1 1 Training in technical centers January Institutional 10 4 1 1 2 Professional institutes January Institutional 10 4 1 1 3 University education January Institutional 10 4 1 1 4 Postgraduate education April to May Institutional

126 A law or custom often determines the time of the year in which a service is provided. For example, the academic year of primary and secondary education extends from March to December, but school uniforms are available from January to March each year. 127 There are cases in which a commercial decision increases or reduces the physical space allocated to the sale of a product in a given period, thus enhancing the supply of one or more other products. This is the case, for example, with toys, which in the summer period tend to be replaced on shelves by school clothing and camping equipment.

Reason for D G C SC P Product description Date of collection temporariness

12 5 1 1 6 Fees for parent/guardian centers December Institutional Depends on the date of 12 5 1 1 8 Child day care services Institutional updating of each source

Source: National Statistics Institute (INE)

Seasonal (autumn-winter and spring-summer) and temporary128 varieties of division 3, clothing and footwear, are subject to a calendar. The seasonality and temporariness defined in the calendar establish that the price information for the last month of each season (January for spring-summer and July for autumn-winter) is used in the calculation, provided that the quantity of prices meets the criterion of representativity129. In addition, prices are collected one month prior to the start of the season defined in the calendar, and these prices are used in the CPI calculation if and only if the same criterion of representativity is met130. The calendar for seasonal varieties of division 3 is shown in the following table.

Table 11. Calendar of seasonality for clothing and footwear

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Autumn-winter √ X X X X X √

Spring-summer √ √ X X X X X

School X X

Note: X = months in which the variety is in season. √ = months in which the prices of the variety are collected, but its use in the calculation of the index is subject to a minimum of 50% of the total number of prices of the sample. If this minimum is not met, the prices are imputed by the carry-forward method. Source: National Statistics Institute (INE)

The carry-forward method of imputation is used in off-season periods. This method consists of repeating the last price collected until the price of the variety is again available in the market.

9.2.4. Products that are distributed free of charge

Some exceptional situations occur in which a company or establishment offers its goods or services free of charge. Generally, these fall into one of the following two cases:

a) When a private company or public entity temporarily provides a product free of charge and the State, through a transfer, universally subsidizes the price, the last recorded price is carried forward.

b) When a specific private company or public entity provides a product to the market free of charge, it is left out of the CPI calculation because it is a transfer and not a sale. When the product is no longer offered free of charge, the product is incorporated into the CPI calculation, following the defined procedures for adding a new variety to the index.

128 The examples of temporary varieties are garments and school footwear. 129 The quantity of prices collected must be greater than 50% of the total price collection established for each month. 130 Because the prices of varieties collected for the calculation apply distinct methods of imputation when necessary, the criterion of representativity is not used for the months when the variety is in season.

Chapter 10. CPI calculation algorithm

This chapter presents aggregation methodologies arranged by hierarchical level of the basket, and the mathematical formulas of the indices used to calculate the index. As indicated in previous chapters, the ordering of products in the CPI basket follows the COICOP structure. The aggregation system ensures that it is always possible to obtain the general index from any level of the aggregation structure (product, subclass, class, group, and division). Thus, the divisions (the highest level of aggregation) consist of the aggregation of the groups, and groups consist of classes, which, in turn, consist of subclasses. The subclasses are the result of the aggregation of products, which are in turn the result of the aggregation of varieties. Varieties consist of variety-establishments (the elementary aggregate). As presented in the figure below, the indices belonging to the higher levels of aggregation allow for international comparison, while the aggregates of lower levels, such as subclass, product, variety, and variety-establishment, are subject to the definition of each country, according to its own characteristics.

Figure 5. Classification of the CPI according to level of aggregation

Source: National Statistics Institute (INE)

10.1. General calculation algorithm

The CPI construction process has two stages:

. First stage: elementary aggregates are calculated with price information of each variety-establishment. The variations of each are aggregated by a geometric mean because it is assumed that a high degree of substitution exists between varieties, which is why they do not have weightings.

. Second stage: the elementary indices are aggregated to obtain higher-level indices. For this purpose, the arithmetic mean, weighted from the level of product to the level of the general CPI, is used. In this stage, there is little or no substitution between products. In addition, classifications at or above the level of product have fixed weights.

The CPI calculation algorithm is shown below.

Figure 6. Algorithm of the calculation of the CPI

Source: National Statistics Institute (INE) The indices of variety and variety-establishment are known as elementary aggregates. An elementary aggregate is a micro-index of a ratio of prices, the aggregations of which make up the first level of publication available to users (i.e., product)131. Except for some exceptions (products with special calculation and treatment), variations of elementary aggregates use a self-weighted geometric mean because of the high degree of substitution between varieties. Because varieties have no weighting, the can be updated annually with available market information.

131 In order to safeguard statistical secrecy as established by Law 17.374, the indices of variety and variety- establishment are not published on INE’s website.

The following table summarizes the aggregation methods used at the different levels of the CPI basket structure.

Table 12. Methods of aggregation

Level of aggregation Method of aggregation From division to CPI Arithmetic mean From group to division Arithmetic mean From class to group Arithmetic mean Weighted From subclass to class Arithmetic mean From product to subclass Arithmetic mean From variety to product Geometric mean Self-weighted From variety-establishment to variety Geometric mean (*)

Note: (*) An exception is made for products with a special calculation or with treatment for which there is a weighting. These products are aggregated by geometric mean or weighted arithmetic mean, depending on the product. Source: National Statistics Institute (INE)

10.2. Aggregation at the elementary level

The general algorithm of the CPI base 2018=100 starts with the calculation of the index of variety-establishment for all varieties. This index is calculated as the ratio between the price of the current month and of the previous month, as follows: (푒) 푃푀푡,푣 퐼푉퐸푡,푣,푒 = (푒) ∗ 100 푃푀푡−1,푣

Where 퐼푉퐸푡,푣,푒 is the index of variety-establishment for establishment e of variety v, which is associated with the corresponding product p. The prices are entered as collected by the enumerator, although products that require special treatment132 are excluded. The frequency with which prices associated with a product are collected depends on its volatility. If more than one price is collected per establishment during a month (i.e., every week or every two weeks), the average of these prices is used in the calculation. This is the case of the prices of some fruits and vegetables at street markets, where prices are collected weekly because of their volatility. In this case, the street market is considered to be a single establishment, and the price used in the calculation is the average of each collection. This occurs mainly in varieties associated with food and fuel. 푛푗 푝 푃푀(푒) = ∑ 푗,푒 푡,푣 푛푗 푗=1 Where PM is the monthly price in establishment e, which is associated with variety v, and nj is the number of prices gathered in month t in the establishment. The aggregation process begins with calculating the indices of variety, which use a geometric mean of the respective indices of variety-establishment (IVE). The IVE are in turn associated with a specific variety. This equation is as follows:

132 For more information, see sections 8.4.2 and 8.4.3 of this manual.

푛푒 푝 1⁄푛푒 퐼푉퐴푅푡,푣 = ∏(퐼푉퐸푡,푣,푒) 푒=1 Where IVAR is the index of variety that is associated with product p, and ne is the number of establishments per each variety v of product p. The aggregation continues to the product index, which is obtained from the geometric mean of the indices of varieties: 푛푣 1⁄푛푝 퐼푃푅푂푡,푝 = ∏(퐼푉퐴푅푡,푝,푣) 푣=1 Where IPRO is the index of product p in period t, and nv represents the total number of varieties that belong to product p.

10.3. Aggregation at higher levels

Higher-order indices are obtained by arithmetic aggregation and consist of the following: a) micro-index of product, b) micro-index of subclass, c) micro-index of class, d) micro-index of group, e) micro-index of division, and f) Consumer Price Index.

a) Calculation of the product micro-index (MIPRO): with this calculation, the information of the corresponding subclasses can be grouped together.

푀퐼푃푅푂푡−1,푝 푀퐼푃푅푂 = 퐼푃푅푂 ∗ 푡,푝 푡,푝 100

푀퐼푃푅푂0,푝 = 100

133 The 푀퐼푃푅푂0,푝 of the CPI remain fixed at the year 2018 .

b) Calculation of the micro-index of subclass (푴푰푺푪푳):

푛푝 푀퐼푃푅푂푡,푝 ∗ 푊푝푟표푝 푀퐼푆퐶퐿푡,푠 = ∑ 푊푠푐푙푠 푝=1

Where 푛푝 is the number of products in subclass 푠, 푊푝푟표푝 is the weighting of product

푝, and 푊푠푐푙푠 is the weighting of subclass 푠.

The index of subclass is determined by using the following equation:

푀퐼푆퐶퐿푡,푠 퐼푆퐶퐿푡,푠 = ∗ 100 푀퐼푆퐶퐿푡−1,푠

c) Calculation of micro-index of class (푴푰푪푳푨):

133 푀퐼푃푅푂퐴,푡 To change the base period from period A to period B, the following equation may be used: 푀퐼푃푅푂퐵,푡 = ∗ 푀퐼푃푅푂퐴,0 100.

푛푠 푀퐼푆퐶퐿푡,푠 ∗ 푊푠푐푙푠 푀퐼퐶퐿퐴푡,푐 = ∑ 푊푐푙푎푐 푠=1

Where 푛푠 is the number of subclasses in class 푐, 푊푠푐푙푠 is the weighting of subclass 푠, and 푊푐푙푎푐 is the weighting of class 푐.

The index of class is determined by using the following equation:

푀퐼퐶퐿퐴푡,푐 퐼퐶퐿퐴푡,푐 = ∗ 100 푀퐼퐶퐿퐴푡−1,푐 d) Calculation of the micro-index of group (푴푰푮푹푼):

푛푐 푀퐼퐶퐿퐴푡,푐 ∗ 푊푐푙푎푐 푀퐼퐺푅푈푡,𝑔 = ∑ 푊푔푟푢𝑔 푐=1

Where 푛푐 is the number of classes in group 푔, 푊푐푙푎푐 is the weighting of class 푐, and 푊푔푟푢𝑔 is the weighting of group 푔.

The index of group is determined by using the following equation:

푀퐼퐺푅푈푡,𝑔 퐼퐺푅푈푡,𝑔 = ∗ 100 푀퐼퐺푅푈푡−1,𝑔 e) Calculation of the micro-index of division (푴푰푫푰푽):

푛𝑔 푀퐼퐺푅푈푡,𝑔 ∗ 푊푔푟푢𝑔 푀퐼퐷퐼푉푡,푑 = ∑ 푊푑푖푣푑 𝑔=1

Where 푛푔 is the number of groups in division 푑, 푊푔푟푢𝑔 is the weighting of group 푔, and 푊푑푖푣푑 is the weighting of division 푑.

The index of division is determined by using the following equation:

푀퐼퐷퐼푉푡,푑 퐼퐷퐼푉푡,푑 = ∗ 100 푀퐼퐷퐼푉푡−1,푑 f) Calculation of the Consumer Price Index of month 풕, 푰푷푪풕: the CPI is obtained each month by the following formula:

푛

퐼푃퐶푡 = ∑ 푀퐼푃푅푂푡,푝 ∗ 푊푝푟표푝 푝=1

Where 푛 is the total number of products in the basket of goods and services.

10.4. Weights used

The weights used for higher-level aggregation come from the information obtained in the VIII EPF (2016-2017). It is important to emphasize that the weights of the CPI basket base 2018=100 were obtained from the level of product to the level of division and that these weights remain fixed during the validity of the base. To maintain consistency in the hierarchical structure of the basket, the definitions of the weightings must meet the following criteria:

a) Weighting of product: the sum of the weights of products p = {1, …, ns} belonging to subclass s is equal to the weighting of subclass s.

푛푠

푊푠푐푙푠 = ∑ 푊푝푟표푠,푝 푝=1

Where the sum of weights of all products of the basket, p = {1, …, n} is 100. This is repeated at each hierarchical level of the basket. Thus, the sum of the weights of all the classes, groups, or divisions of the basket must also equal 100.

푛

∑ 푊푝푟표푝 = 100 푝=1

Each product is associated with a subclass, class, group, and division that corresponds with COICOP.

b) Weighting of subclass: the sum of the weightings of the subclasses, s = {1, …, nc} belonging to class c, is equal to the weighting of class c.

푛푐

푊푐푙푎푐 = ∑ 푊푠푐푙푐,푠 푠=1

Each subclass is associated with a class, group, and division that corresponds with COICOP.

c) Weighting of class: the sum of the weightings of classes, c = {1, …, ng}, belonging to group g, is equal to the weighting of group g.

푛𝑔

푊푔푟푢𝑔 = ∑ 푊푐푙푎𝑔,푐 푐=1

Each class is associated with a group and division that corresponds with COICOP.

d) Weighting of group: the sum of weightings of groups g = {1, …, nd}, belonging to division d, is equal to the weighting of division d.

푛푑

푊푑푖푣푑 = ∑ 푊푔푟푢푑,𝑔 𝑔=1

Each group is associated with a division that corresponds with COICOP.

e) Weighting of division: the sum of weightings of the twelve divisions of the CPI base 2018=100 is 100. 12

∑ 푊푑푖푣푑 = 100 푑=1

It should be noted that, in the ascending construction from the level of subclass to the level of the general index, the aggregation method is a weighted arithmetic mean. Finally, the successive aggregation of higher-level indices enables the calculation of the CPI base 2018=100, which is calculated with a Laspeyres (Lowe) formula134. The CPI is constructed each month by aggregating levels, but, in general, the CPI can be expressed as the weighted arithmetic mean of the relative prices used as weights by the shares in the expenditure of the base period:

푁 푡 푁 푝푝 퐶푃퐼 = [∑ 푊푝푟표 ] ∗ 100 = [∑ 퐼 푊푝푟표 ] ∗ 100. 푡 푝푡−1 푝 푡,푝 푝 푝=1 푝 푝=1

Where 푊푝푟표푝 is the weighting of product 푝, where 퐼푡,푝 is the price relative of product 푝 in month 푡 compared with the previous month.

10.5. Calculation of base year (referential series)

The construction of the base year begins with the collection of prices, during the year 2018, of all the varieties that make up the products of the basket. Then, the elementary indices follow a procedure that consists of the following steps:

a) Construction of the micro-index of product: the first step consists in the construction of micro-indices of product (MIPRO). Each product has a MIPRO value for each month of the base year (from January to December 2018).

푀퐼푃푅푂푛 ∗ 퐼푃푅푂푛 푀퐼푃푅푂푛 = 푡−1 푡 푡 = 2, … . .12; 푡 100

푛 Where 푀퐼푃푅푂1 = 100

b) Calculation of the average of the micro-index of product: in the second step, the annual average of the monthly MIPRO is calculated for each of n products of the basket.

∑12 푀퐼푃푅푂푛 퐴푣푒푟푎푔푒 푀퐼푃푅푂푛 = 푡=1 푡 12

134 For more information, see section 3.4.2. (Conceptual framework) of this manual.

c) Micro-index of product rescaled for the year 2018: the third step consists in recalculating monthly micro-indices for each of the n products. To do this, the original micro-index is divided by the average of the micro-index of product, which was calculated in the previous step.

푀퐼푃푅푂푛 푀퐼푃푅푂푛 푟푒푠푐푎푙푒푑 = 푡 ∗ 100 푡 퐴푣푒푟푎푔푒 푀퐼푃푅푂푛

The above procedure generates what is known as a base year or reference year. The referential series are used only for economic analysis and not for readjustment purposes. During the year 2018, the official variations of the CPI were calculated and published with respect to base 2013=100. Between January and December 2018, the elementary indices were constructed; thus, they were not published during that year and are not official. Once 2018 was over, they were rescaled, as shown above, so that the average of the twelve monthly indices equals 100. Finally, the first variation of the new base 2018 was obtained by comparing the MIPRO of January 2019 with the recalculated MIPRO of December 2018 (referential series 2018=100).

10.6. Calculation of variations and impacts

The public user of price statistics is interested in knowing, on a monthly basis, the variation of prices and their comparison with the previous month, the cumulative variation from December of the previous year, and the variation compared to the same month in the previous year. These variations are known as the monthly, cumulative (year-to-date), and twelve-month (year-on- year) variations, respectively. The public is also interested in knowing which products are affecting the variation of the CPI during the month, in the year to date, and in comparison with the previous year. This influence is known as impact. It measures the weight or contribution of a product, a subclass, a class, a group, or a division in regard to the total variation of the CPI on a monthly, cumulative, and twelve-month basis.

10.6.1. Calculation of variations

This section shows how each of the variations of the CPI, regularly published by INE, is calculated.

a) Monthly variation: is the change in the CPI in month 푡 when compared with the previous month 푡 − 1. This change can be determined by the following equation:

퐶푃퐼푡 푚표푛푡ℎ푙푦 푣푎푟푖푎푡푖표푛 (%) 퐶푃퐼푡 = [ − 1] ∗ 100 퐶푃퐼푡−1

b) Cumulative variation or year-to-date variation: is the cumulative variation from December of the previous year. It measures the variation in prices from December of the previous year to the current month. It is calculated by the following equation:

퐶푃퐼푡 푐푢푚푢푙푎푡푖푣푒 푣푎푟푖푎푡푖표푛 (%) 퐶푃퐼푡 = [ − 1] ∗ 100 퐶푃퐼퐷푒푐 푝푟푒푣푖표푢푠 푦푒푎푟

c) Year-on-year variation or twelve-month variation: measures the variation of the CPI of the current month when compared with the same month in the previous year. It is calculated with the following equation:

퐶푃퐼푡 12– 푚표푛푡ℎ 푣푎푟푖푎푡푖표푛 (%) 퐶푃퐼푡 = [ − 1] ∗ 100 퐶푃퐼푚표푛푡ℎ 푡, 푝푟푒푣푖표푢푠 푦푒푎푟

In general, when the inflation for any given year is published, it refers to the change in the CPI from December of one year compared with the CPI for December of the previous year. It is important to mention that these formulas for calculating changes are also applicable to the indices of division, group, class, subclass, and product.

10.6.2. Calculation of impacts

As mentioned above, impacts measure the weight or contribution that a particular product, subclass, class, group, or division has on the total variation of the CPI. How these impacts are calculated is demonstrated below:

퐼푖,푡−1 ∗ ∆퐼푖,푚표푛푡ℎ푙푦 푀표푛푡ℎ푙푦 푖푚푝푎푐푡 = ∗ 푊퐼푖 퐶푃퐼푡−1

퐼푖,푑푖푐 ∗ ∆퐼푖,푐푢푚푢푙푎푡푖푣푒 퐶푢푚푢푙푎푡푖푣푒 푖푚푝푎푐푡 = ∗ 푊퐼푖 퐶푃퐼푑푖푐

퐼푖,푡−12 ∗ ∆퐼푖,12–푚표푛푡ℎ 12– 푚표푛푡ℎ 푖푚푝푎푐푡 = ∗ 푊퐼푖 퐶푃퐼푡−12

Where ∆퐼푖,푗 represents the monthly, cumulative, or 12-month variation and 푊퐼푖 is the weighting of the index under analysis in the basket of the CPI. The sum of the monthly impacts is equal to the monthly variation of the CPI (or any other level of aggregate under analysis) of the month. These figures may differ from those published in the bulletins of INE because of the difference in the number decimal places used in the calculation. The same is true for cumulative impacts and cumulative variations as wells as for twelve-month impacts and twelve-month variations.

10.7. Linking of series

Each change of base year involves changing the products and weights of the basket. This makes each set of indices calculated during a period with a particular basket not strictly comparable with another. However, from a practical perspective, a continuous series of the index is required for comparing how prices have changed over time. These temporary breaks in the index are resolved by means of the method of splicing the levels of the previous bases to the level of the new base (in this case, 2018=100). When carrying out this process, the officially published variations must be preserved.

The CPI series, available from March 1928 to the present, was ruptured in 2009 because, with the rebasing in that year, two relevant aspects were modified: a) the geographical coverage135 and b) the reference period of the index136. Because of these changes, it is not methodologically advisable to join the series prior to 2009 with subsequent rebasing, which is why the INE makes two series of the CPI available to users:

a) Index of the spliced series between March 1928 and December 2009, whose base is December 2008=100.

b) Index of the spliced series from January 2010 to December 2018, whose base year is 2018=100.

Because variations of the CPI published each month are official and are not corrected, INE did not take any steps to make the series methodologically comparable prior to 2009. Thus, the splices in the periods for which they can be made are only at the level of the general index and of division, not lower levels (such as group, class, subclass, and product). To splice or link the series of the CPI base 2018=100 with the CPI base 2013=100, which covers the period between January 2014 and December 2018, the linking factor 137 is used. The linking factor is calculated by using the following formula:

퐷푒푐 2018 퐶푃퐼퐵푎푠푒 2018 퐿푖푛푘푖푛푔 퐹푎푐푡표푟 = 퐷푒푐 2018 퐶푃퐼퐵푎푠푒 2013

This linking factor rescales the level of the indices from base 2013=100 to the level of base 2018=100. For this purpose, each of the monthly values of the index from the previous base is multiplied by the linking factor to obtain the CPI series with the new base 2018=100138. This procedure ensures that the official variations of the CPI, calculated and published by INE, are maintained. Finally, the series of base 2018=100 with the previous bases (2013 and 2009)139 is spliced at the level of division and of the general index.

10.8. Adjustment factor for updating monetary values

Occasionally, users will need to adjust or update monetary values from one period to another. To do this, the effect of variations in the general level of prices between periods must be considered. This involves using a factor for the adjustment of values. This factor transforms a nominal value in pesos from month 푚 of year 푎 to its corresponding value in pesos of month 푛 in year 푡. To make this adjustment, the values are standardized (i.e.,

135 Until December 2009, the geographical coverage of the index included only Greater Santiago. Later, the CPI base 2009=100 expanded coverage to a national level, which included the fifteen regional capitals and their conurbation zones. In the current base 2018=100, coverage expanded further to include the new Region of Ñuble. 136 The reference period changed from base month (December 2008=100) to a base year (2009=100). 137 Dec 2018 CPIBase 2018 is the value associated with the referential series of base 2018=100. 138 This splicing can be applied to the historical series of the CPI 2010-2018 (base 2013). To obtain the index of the month December 2009, the published price variation of the month of January 2010 is used and anchored to the level of index in that month. 139 The series thus constructed is called the Spliced Historical Series of Divisions and the general CPI, Indices, and Variations, December 2009 – December 2018.

scaled to a comparable level). Thus, the series must be of the same base year so that the structure for calculating indices is comparable at the same level. This procedure is adequate whenever a long-term analysis of price variation is needed. However, this methodology is not applicable when the value over time must be adjusted and the initial period is prior to December 2009. This is because, with the change of base year 2009=100, the general methodology changed by extending the territorial coverage of the index and by using a calendar year as its base for calculation (instead of using a base month). Thus, the series prior to this change cannot be spliced with subsequent series. In order to compensate for this inconvenience, Supreme Decree No. 322 of the Ministry of Economy, Development, and Reconstruction (December 28, 2009), which was published in the Official Gazette on 29 January 29 2010, establishes the adjustment factors that must be used whenever a monetary value needs to be adjusted. For periods prior to December 2009, a factor 퐹1 is used, and, for periods subsequent to January 2010, the factor 퐹2 is used. Where:

퐷푒푐푒푚푏푒푟 2009 퐶푃퐼푛,푡 퐶푃퐼푏푎푠푒 퐷푒푐푒푚푏푒푟 2008 푏푎푠푒 푦푒푎푟 푏 퐹1 = 푚−1,푎 , 퐹2 = 퐷푒푐 2009 퐶푃퐼푏푎푠푒 퐷푒푐푒푚푏푒푟 2008 퐶푃퐼푏푎푠푒 푦푒푎푟 푏 and where 푚 and 푎 are the month and year of the monetary value to be updated, 푛 and 푡 are the final month and year to which the monetary value140 is to be updated, and 푏 is the last current base year.

To update an initial monetary value 푀푚,푎 of month 푚 and year 푎, previous to December 2009, and to obtain the final monetary value 푀푛,푡 of month 푛 and year 푡, after January 2010, using 2018=100 as the current base period, the following methodology is used:

1- To update 푀푚,푎 to December 2009, 퐷푒푐푒푚푏푒푟 2009 퐶푃퐼푏푎푠푒 퐷푒푐푒푚푏푒푟 2008 푀퐷푒푐 2009 = 푀푚,푎 ∗ 퐹1 = 푀푚,푎 ∗ 푚−1,푎 (a. 1) 퐶푃퐼푏푎푠푒 December 2008

2- To update the value 푀퐷푒푐 2009 to the final value 푀푛,푡 푛,푡 퐶푃퐼푏푎푠푒 푦푒푎푟 2018 푀푛,푡 = 푀퐷푒푐 2009 ∗ 퐹2 = 푀퐷푒푐 2009 ∗ 퐷푒푐,2009 (a. 2) 퐶푃퐼푏푎푠푒 푦푒푎푟 2018 When values for December 2009 or after must be adjusted using the current base 2018=100, the values are calculated with the following formula: 푛,푡 퐶푃퐼푏푎푠푒 푦푒푎푟 2018 푀푛,푡 = 푀푚,푎 ∗ 퐹푛,푡 = 푀푚,푎 ∗ 푚−1,푎 (b) 퐶푃퐼푏푎푠푒 푦푒푎푟 2018 and, for cases of values of or prior to December 2009, the spliced historical series of 1928 to 2009 should be adjusted for the same reasons as above, but using December 2008=100 as base141, such that: 푛 퐶푃퐼푡 푀푛,푡 = 푀푚,푎 ∗ 퐹푛,푡 = 푀푚,푎 ∗ 푚−1 (c) 퐶푃퐼푎 Figure 7, below, shows the schema of the adjustment factor.

140 For example, to adjust the value of 150,000 pesos of June 1987 to August 2016, 푚 is June and 푎 is the year 1987, and 푛 is August and 푡 is the year 2016. 141 The spliced historical series of the CPI 1928-2009 uses December 2008=100 as base period.

Figure 7. Schema of the adjustment factor, validity, and reference period of the CPI basket

Note: (1) uses formulas a.1 and a.2, (2) uses formula b, and (3) uses formula c. Source: National Statistics Institute (INE)

10.8.1. Examples of adjustment for updating monetary values

Three situations that may arise when updating monetary values142 are described below.

10.8.1.1. Updates that cover periods previous to December 2009143 and periods after January 2010

In this case, formulas (1.1) and (1.2) are used. To update $150,000 of October 1998 to December 2015, the following information is required:

Periods Base Dec 2008=100 Base 2018=100 Sep-98 68.743 - Dec-09 98.62 91.28 Dec-15 - 111.87

Note: values with base 2018=100 are fictitious and used only as an illustration. The values of base December 2008=100 are the official values published on INE’s website. Source: National Statistics Institute (INE)

The following steps are needed to complete the calculation:

142 For adjustment exercises, the spliced historical series 1928-2009 and the spliced series, base year 2018=100, are used. These series are published on INE’s website. 143 Whenever the user needs to adjust monetary values prior to 29 September 1975, he should convert the value into the current pesos. The old pesos were valid until 31 December 1959. Escudos were then the currency in use until 28 September 1975, and the current peso has been in use since 29 September 1975. The currently valid exchange rates are the following: 1 escudo = 1,000 old pesos, 1 current peso = 1,000 escudos, and 1 current peso = 1,000,000 old pesos.

1- To update $150,000 to December 2009

98.62 푀 = 푀 ∗ 퐹1 = $150,000 ∗ = $150,000 ∗ 1.434618798 = $215,193 퐷푒푐 2009 푚,푎 68.743

2- To update the value of 푀퐷푒푐 2009 to the final value 푀푛,푡

111.87 푀 = 푀 ∗ 퐹2 = $215,193 ∗ = $215,193 ∗ 1.225569675 = $263,734 푛,푡 퐷푒푐 2009 91.28

10.8.1.2. Updates for periods after January 2010

In this case, the formula described in (2) is used. To update $150,000 from February 2010 to June 2017, only information from the spliced historical series base 2018=100 is required, as presented below:

Periods Base 2018=100 푭풏,풕 푴풏,풕 Jan-10 92.00 1.26282609 $189,424 Jun-17 116.18

Note: The base 2018=100 values are fictitious and used only for illustration. Source: National Statistics Institute (INE)

10.8.1.3. Updates for periods previous to December 2009

In this case, formula (3) must be used. To update $150,000144 from May 1932 to April 2006, only information from the spliced historical series base December 2008=100 is required, as presented below:

Base December Periods 푭 푴 2008=100 풏,풕 풏,풕 Apr-32 0.000000466944 183030513.3 $27,454,576,994,243

Apr -06 85.465

Source: National Statistics Institute (INE)

10.9. Use of the CPI calculator

INE has made a CPI Calculator145 available to the public on its institutional website. This tool is intended to perform the required exercises and adjustment calculations in a faster and more efficient manner. To use the CPI calculator to adjust a given value, the user needs only the value to be adjusted and the initial and final period of the adjustment. The CPI calculator operates by using algorithms that replicate the same calculation process shown in the formulas of the previous section. The corresponding spliced series are used as input, and the general index of each period is calculated with a precision of twelve decimals.

144 The information is expressed in current pesos. In old pesos, the value is 150,000,000,000. 145 The calculator can be found at http://www.ine.cl/

This last consideration is important because there may be differences between the final amounts obtained the manual method (which uses the published figures of two decimals) and the amount obtained through the CPI calculator. Below in figures 8 and 9 can be seen the process of calculation with the CPI calculator. These calculations are then contrasted with manual results from previous examples.

Figure 8. CPI Calculator

Source: National Statistics Institute (INE)

Figure 9. Sample use of the CPI calculator, section 10.8.1.2, adjust $150,000 of February 2010 to June 2017

Source: National Statistics Institute (INE)

The calculator shows the accumulated price variation in the selected time interval and the adjusted monetary value (yellow box 1 and 2, respectively, of figure 9), in addition to offering the possibility of exporting the adjustment in PDF format.

10.10. Analytical indices

Analytical indices are groupings of products that share certain characteristics and that provide specific information to users on price variations in each of these subsets. The analytical indices disseminated with the CPI base year 2018 are the following:

1. CPI minus Food and Energy: is an index from which all products that make up the indices of Food and Energy are excluded. The CPI minus Food and Energy consists of 218 products and represents 73.16% of the weighting of the CPI basket. 2. Fresh Fruits and Vegetables: this index includes products classified as fresh fruits and vegetables. This index consists of 17 products and represents 2.82% of the CPI basket. 3. Food: this index includes food products and non-alcoholic beverages, which together form the entirety of Division 1 of the current basket of products. The index has 76 products and represents 19.30% of the weighting of the CPI basket. 4. Services: this index includes products classified as services. The index consists of 83 products and represents 49.36% of the weighting of the CPI basket. 5. Goods: this index includes all products that are not services. The index consists of 220 products and represents 50.64% of the weighting of the original basket. 6. Energy: this index consists of nine products, which represent 7.54% of the weighting of the CPI 2018=100 basket. These products are electricity, network gas, liquefied gas, charcoal, kerosene, firewood, gasoline, diesel fuel, and lubricants and oils for automobiles. 7. Tradable Products: shows the variation of the set of products that can be traded internationally. All non-perishable goods, for example, fall into this category. The index consists of 223 products and represents 54.14% of the CPI basket. 8. Non-Tradable Products: the inverse of the previous index, the analytical index of Non-Tradable Products shows the variation in prices of the set of products that cannot be traded internationally. This index represents 45.86% of the total weighting of the CPI and consists of 80 products.

For more information on the components of each of the analytical indices, see appendix 6 of this manual.

Table 13. Summary of analytical indices, CPI base 2018=100

Weighting in the Analytical index No. of products 2018 CPI basket (%) CPI except Food and Energy 73.16 218 Fresh fruit and vegetables 2.82 17 Food 19.30 76 Services 49.36 83 Goods 50.64 220 Energy 7.54 9 Index of Tradable Products 54.14 223 Index of Non-tradable Products 45.86 80

Source: National Statistics Institute (INE)

Chapter 11. Treatment of changes in quality

The need to deal with changes in the quality of products and services is intrinsic to any price index. This change in quality derives from the variation over time in the characteristics of the

goods that are produced, traded, and consumed, as well as in the proportions between them. In modern markets, the dynamism present in the prices of products and services (appearance, modification, and disappearance) is one of the principal problems in the formation of price indices with a fixed base basket. The need for quality adjustments arises whenever it is not possible to track the same variety between periods or when new varieties appear in the basket of goods and services. Thus, the problem of comparing the same goods over time will likely be constant. Therefore, clear guidelines must be established for their treatment. This chapter describes these guidelines.

11.1. Replacements and quality changes

Because the CPI basket measures the price variation of a fixed basket over time, whenever one variety must be replaced by another, the enumerator must always seek to maintain the quality of the product constant146. However, rapid technical progress147 may often force the enumerator to replace the disappearing variety with another variety with one or more different characteristics and thus of different quality. It is necessary to determine which part of the price of the replacement variety corresponds to the difference in quality, and then to use the pure price in the calculation of the index. This process is known as quality adjustment. Quality adjustment is a technique that enables the enumerator to estimate the difference in quality between two varieties in order to adjust this difference in the price of a replacement variety and maintain the quality of the basket constant. In other words, quality adjustment is an estimate of the additional amount a consumer is willing to pay for the new characteristics of the new level of quality148. The definition of changes in quality and their adjustment are two aspects of the same phenomenon. A change in the quality of a good or service occurs when one of its characteristics (but not most of them) is modified. Therefore, the enumerator must evaluate these changes from the perspective of the consumer149 because it leads to a difference in their levels of usefulness150. Ideally, information should be available on the characteristics that determine the price of a product, such as the brand, the place of purchase, and technical characteristics or specifications. Strictly speaking, the need to make replacements in varieties involves evaluating the possibility of making a quality adjustment.

11.2. Replacement of varieties

The replacement of varieties originates in the disappearance of the variety and in the low level of representativity of a variety in the market. The operational criterion for replacements indicates that the maximum time of absence of the price of a variety is two months. This means that in the second month of absence the enumerator must propose a replacement. This replacement is evaluated in the offices of INE

146 For the CPI, quality has been defined from the perspective of production, in which quality consists of the characteristics or specific attributes (such as design specifications and objective aspects that are measurable and quantifiable) that determine the level and development of prices of a product. These characteristics are linked to the complete productive process, and they are ultimately reflected in the price levels observed in the market. 147 This is a problem faced by all nations and is topic of priority for Eurostat. INE España (2017), p. 39. 148 OIT et al. (2006), apartado 1.230, p. 18. 149 OIT et al. (2006), apartado 1.230, p. 32. 150 INE España (2006), p. 42.

and accepted or rejected depending on whether it has the necessary attributes defined in the basket specifications. In the case of products that are subject to changes in fashion (clothing and footwear) or rapid technological change, as well as in the case of establishments that stop selling a product, the enumerator must propose a replacement in the first month of its absence from the establishment. In the months after the replacement of a variety, the price of the newly incorporated variety is monitored. For example, suppose that the prices of two varieties (A and C) are being monitored. In April, variety A is no longer being sold, thus the enumerator proposes variety B:

Figure 10. Schema of monitoring prices in the event of the discontinuity of a variety

Note: The horizontal arrows indicate the collected prices used in the calculation of relative prices of each variety. The diagonal arrow shows the link, by quality adjustment, between the prices of variety A (which disappears) and variety B (which replaces it). Source: National Statistics Institute (INE)

As can be seen above in table 10, the price of variety A for the month of April is not available. Thus, if variety B has characteristics other than those of A, it is necessary to assess whether these differences require a quality adjustment. With a quality adjustment, the price relative between A and B can be calculated without effect from the difference in quality.

11.3. Quality adjustments

As mentioned above, the method of quality adjustment allows for linking (imputation) between the price of the variety that disappeared and the new variety that has been added to the CPI basket. A flowchart of decisions involved in quality adjustments is shown below.

Figure 11. Algorithm of quality adjustment in the CPI base 2018=100

Source: National Statistics Institute (INE)

As can be appreciated in the figure, the CPI base 2018=100 uses both implicit and explicit methods of quality adjustment. a) Methods of adjustment where the magnitude of the difference in quality cannot be determined. In this group, two methods are used151:

151 Other available methods are the following: - Overall mean or targeted mean imputation: This method assumes that prices have similar variations. Thus, the variations of prices of other varieties are used as estimates of the price variations of missing varieties. - Class mean imputation: This method differs from the overall mean only in its source of imputed price variation of the missing variety of the period. Instead of using the variation of the index obtained from all the varieties that

 Comparable varieties. The attributes (characteristics) of the replacement variety are similar to the variety that disappeared. Therefore, price differences can be explained by market conditions, not by differences in quality. For this method, the price relative of the variety is calculated by using the price of the replacement variety and the price of the variety that disappeared for the same month in which the replacement was made.  Non-comparable varieties. The attributes (characteristics) of the replacement variety are different from the variety that disappeared. Price differences can be explained by differences in quality, and thus the two varieties are not comparable to each other. In the month of replacement, the price of the replacement variety is observed. In the following month when there are two consecutive observations, the first price relative is used in the calculation of the CPI. b) Adjustment methods for which the magnitude of the difference in quality can be determined. The methods in this group use an explicit adjustment of the difference in quality. These methods are the following152:  Overlap method. A quotient is calculated of the price, in the same period, of a good or service that disappeared and of its replacement. This quotient is considered as an indicator of quality differences and is applied to the price of the replacement variety when calculating the price variation in the respective month. The method assumes that the quality difference in any period is equal to the price difference at the time of chaining.  Options method. This method consists of adjusting the price of the good or service that disappeared by an amount equal to the resource costs of the additional characteristics of the new good or service (replacement variety). This value should be a consumer valuation that reflects the additional services or utility. This method is currently used for the product new automobiles, where new features, which were available in a previous period at extra cost, are incorporated into the new model. Because there is now a product in period t with the added characteristic included in the final price, the next step is to isolate the value that the new characteristic has for consumers. The procedure consists of deducting 50% of the value of the option from

the index contains, the variation of the imputed prices is based on replacement varieties of the same quality, i.e., those that are considered comparable or that are directly adjusted for quality. - Linked to show no price change: This method attributes any price variation between a good or service that disappeared and its replacement to a change in quality. The method arises from circumstances in which comparable replacement goods or services are not available and in which there are relatively large price differences between the two because of different price bases and different levels of quality. Another important circumstance is that the proportion corresponding to changes in quality cannot be identified. Thus, the observed price variation is attributed to changes in quality, the price of which remains constant. - Carry forward: This method is used when the variety is no longer available. For imputation, the price of the previous period is transferred to the next period as if there had been variation. A more extensive explanation can be found in OIT et al. (2006), pp. 106-112. 152 Another explicit method to determine the magnitude of the difference in quality is the following: - Expert judgment: Product specialists are consulted on consumer decisions and asked to indicate the difference in quality between the replacement variety and the one that disappeared. This method is feasible when products are very complex. For a more extensive explanation, see OIT et al. (2006), pp. 127-135.

the price of the product in period t. Thus, the price in period t without the option included can be calculated for period t, and the prices of periods t-1 and t can be compared. For this method, the prices of options in all periods are collected. Thus, the necessary information is available when needed. If no options are available or the informant is unable to value the options, the overlap method will be used.  Hedonic regression method. This method is based on the assumption that the price of a variety can be explained through a set of characteristics. In order arrive at this explanation, a price equation is econometrically estimated according to the set of characteristics of the product. The estimated coefficients of the equation reflect the contribution of each of the characteristics in explaining the price (ceteris paribus153). This method, which is explained in more detail in the following section, is used for the products mobile telephone devices, laptop computers, televisions, cameras, mobile telephone services, and bundled telecommunications services, as well as for some products of Division 3 (clothing and footwear).

11.4. Hedonic models

In order to adjust price indices for quality, the degree to which the price variation reflects the difference in the quality of goods and services must be quantified. A hedonic model is the econometric estimation of an equation that captures the effect of a product's attributes on price (ceteris paribus). This makes it possible to quantify how much of the price variation results from a quality change (for example, a quality change resulting from technological improvement). When replacing one variety with another, the technical specifications (product characteristics) of the old variety and the replacement variety may be different and thus the two prices would not be comparable. With the hedonic model, the price of a variety according to a set of characteristics can be estimated. Then, by comparing the estimated price of the replacement model and the model that disappeared, the difference in quality can be quantified. It is precisely this difference that must be discounted (removed) from the price of the replacement variety to obtain a pure price variation. This ensures that the quality of the products in the basket does not change over time. Quality adjustment by hedonic models consists of decomposing a good or service into its constituent characteristics, in such a way that an estimate of the value can be obtained for the utility for consumers of each characteristic (ceteris paribus). These estimates can thus be used to adjust prices when the quality of the goods or services changes. Although the perception of the quality of a product is the subjective judgment of each individual, quality can be approximated by its physical characteristics. A hedonic model relates the price of a product to its characteristics in the following manner:

푝 = ℎ(푐푖)

Where 푝 is the price of the variety (or model) 푖, 푐푖 is a vector of characteristics associated with variety 푖, and ℎ() is the hedonic function to be estimated. The econometric technique used to estimate this function is known as regression analysis. The estimation of these hedonic models involves prior study, ranging from bibliographic review to international experience of the statistical agencies with hedonic models and review of related specialized journals.

153 This Latin term means “All else remaining constant”.

For goods and services that use this method, the estimation of the linear model starts from a sample in which both the price and a detailed description of the characteristics of each good or service are collected for the month under observation. The estimation of the hedonic model154 푇 is based on a vector of 푘 características (푥1푖, … , 푥푘푖) for a cross-sectional database, as in the following equation: 푘

푝푖 = 훽0 + ∑ 훽푖푥푗푖 + 휀푖 푗=1

Where 훽푖 is the set of coefficients to be estimated and 휀푖 are independent and identically distributed random errors with a normal distribution 푁(0, 휎2). The model is selected according to the variables, including economic and statistical criteria (significance of the variables), suggested by the literature. To do this, an iterative process is begun in which characteristics are incorporated to the model one by one, evaluating the statistical significance of each. The process ends when a model is obtained in which all its characteristics (variables) are significant (with a significance level of 5%), and there is no other characteristic within the database that provides additional information to the model155. Finally, the statistical properties of the estimated hedonic model are evaluated with the following statistical tests:

. Normality of errors: Jarque-Bera Test. . Homocedasticity of errors: Breusch-Pagan Test or White Test with crossed term and without crossed term. . Correct form of the function: Ramsey test. . Multicollinearity problems: Variance Inflation Factors (VIF). . Sensitivity of the estimated coefficients to changes in the sample: Model simulations with random subsamples. . Existence of outliers and influence on estimates: Robust Regression Method.

Of the statistical procedures listed above, the last two should be described in more detail. Simulations are used to evaluate the sensitivity of the estimates to changes in the sample. For this purpose, between 100 and 500 random subsamples are taken, corresponding to 75% of the original sample. For each subsample, the selected model up to that stage is estimated. A distribution of all the estimated coefficients is generated from which it is possible to construct a confidence interval for each coefficient or to perform statistical significance tests. This procedure assists in evaluating the behavior of the hedonic model estimators in the face of changes in the sample size, enabling more robust models with consistent characteristics over time to be obtained.

154 Before estimating with the hedonic model, an evaluation is made of which is the best transformation of variables (price and characteristics) of the model by Box-Cox transformations (linear, log-linear, log-log, etc.). 155 Eventually, more than one model can be obtained. To do this, the information criteria of Akaike and Schwarz are used for its selection.

With respect to robust regressions, whenever a model of regression through ordinary least squares (OLS) is estimated, some outliers156 or observations with high influence or leverage157 can be found. These observations can have a strong effect on the estimated coefficients. The degree of the outlier and its leverage can make an observation influential158. If there are no conclusive reasons to exclude such observations, estimating by OLS may not be the best method. In this case, the best strategy is to use robust regressions because they can completely exclude influential observations from the analysis or include them all, as is done in an OLS regression. The idea of robust regressions is to weigh, in varying degrees, the observations by how well these observations behave in their degree of influence on the estimates. Thus, robust regressions are useful for observation if there are observations that can generate problems in the estimation by ordinary least squares. If so, these observations pose a solution to the existence of influential observations without eliminating them, so as not to lose information that may be relevant. Since the change of base year 2013, the technical and operational teams of the CPI have worked to apply hedonic models to a greater number of products. In the most recent rebasing (2018), twenty-nine products use these models, which are updated twice a year. For more information on the products whose estimates use hedonic models, see Appendix 4 of this manual.

11.4.1. Adjustment with hedonic models

Having estimated the most appropriate hedonic model with the various statistical tests previously described, we proceed to adjust for quality as detailed below:

Step 1: calculate the estimated prices of each variety subject to quality adjustment. 푘

푒푠푡푖푚푎푡푒푑 푝푟푖푐푒 = 훽̂0 + ∑ 훽̂푖푥푗푖 푗=1

Step 2: adjust base price to reflect new attributes or characteristics.

퐸푠푡푖푚푎푡푒푑 푝푟푖푐푒 표푓 푡ℎ푒 푛푒푤 푣푎푟푖푒푡푦 퐶ℎ푎푛푔푒 푑푢푒 푡표 푑푖푓푓푒푟푒푛푐푒 푖푛 푞푢푎푙푖푡푦 = 퐸푠푡푖푚푎푡푒푑 푝푟푖푐푒 표푓 푡ℎ푒 표푙푑 푣푎푟푖푒푡푦

퐶ℎ푎푛푔푒 푑푢푒 푡표 푑푖푓푓푒푟푒푛푐푒 푖푛 푞푢푎푙푖푡푦 = 푟푞푢푎푙푖푡푦

퐴푑푗푢푠푡푒푑 푝푟푖푐푒 푏푎푠푒 = 푝푟푖푐푒 표푓 푡ℎ푒 표푙푑 푣푎푟푖푒푡푦 ∗ 푞푢푎푙푖푡푦

156 Outliers are defined as those observations whose residues (difference between real and estimated prices) are values extremely far from the rest of the sample. 157 These are observations, within the sample, that have an extreme value for one of the independent variables, in this case, in the vector of characteristics. 158 An influential observation is an observation whose inclusion in the sample alters the estimated coefficients for the estimated regression models. If an influential observation is removed, the estimated coefficients change substantially.

Step 3: compare the price of a new variety with the new price base.

푃푟푖푐푒 표푓 푡ℎ푒 푛푒푤 푣푎푟푖푒푡푦 푃푟푖푐푒 푟푒푙푎푡푖푣푒 = 퐴푑푗푢푠푡푒푑 푝푟푖푐푒 푏푎푠푒

Chapter 12. Techniques and criteria for ensuring the quality of the index

To ensure the quality of the CPI, a series of controls have been defined that include the validation of the information obtained from the establishments (sources of information), the verification by validators of the absence of non-sampling errors associated with data entry, and the analysis of quality by longitudinal and transversal validation techniques159.

12.1. Validation of data

When the monthly information (prices, characteristics, attributes, codes, observations) is entered into the CPI computer system, a series of criteria for the detection of non-sampling errors and outliers begins to operate. The purpose of the control criteria is to ensure compliance with the international quality standards of the indicator. The following sections analyze the methods and criteria of validation of data. The validation of the monthly information for the construction of the CPI has four stages:

a) Validation that the information is complete and coherent b) Validation of typing and data entry c) Longitudinal validation d) Representativity of collected prices

Even when the sample sizes of the data collection are representative, they can be affected by trade policies, the climate, or the delivery of information outside the established dates. For this reason, statistical techniques are used to quantify the impact of having a sample smaller than the target sample. The validation methods and criteria are explained below:

a) Validation that the information is complete and coherent. Supervisors review some of the CPI price collection forms to ensure that all mandatory fields are complete and that there is consistency between what was observed in the market and current coding. b) Validation of typing and data entry. When processing the information, validators in the computer system prohibit, for example, the entry of non-numeric characters in fields that require a number, improperly entered numeric values, and invalid entries. This is the first filter that prevents transcription errors from being transferred to the database of prices. Next, the database is subjected to a review through established validation criteria that mark instances of anomalous behavior as defined by a set of pre-established rules, which are based on the historical information.

159 See OIT et al. (2006) párrafos 9.160 y 12.52-12.55, pp. 208, 260.

In addition, the coefficient of variation from week to week is analyzed for prices that are observed more than once per month, for example, for fresh fruit and vegetables. This analysis detects unusually large variations. c) Longitudinal validation. The longitudinal validation criteria apply to all information collected in a month when the validation process mentioned in the previous point has been completed. The methods used in this process are mainly based on statistical analyses aimed at detecting outliers or inconsistencies, which are then contrasted with exogenous information to facilitate their final validation. . Interquartile method160. This method is used to detect outliers in the weekly collection of price information by comparing the prices of the current week with those of the previous week161. The method uses the quartiles of price relatives as inputs. When a price relative falls outside the limit of tolerance, it must be examined. Review of the evidence by the supervisor may lead to the value being corrected or maintained, after which the price will appear in the records of the CPI calculation system as "validated". . Graphic methods: The method is used to detect outliers graphically by using Boxplot. With this technique, the distribution of the data can be observed to detect the cases of abnormal behavior. At the same time, information from the previous month is displayed in order to affirm whether current and past behavior are consistent across time. In addition, the processed information is purified and validated each week. Relative prices outside the range of +/- 20%162 are reviewed. This process involves reviewing the information contained in the price collection forms, consulting the enumerator, and/or revisiting the source. In this case, the historical behavior of the prices of the variety-establishment makes it possible to discern which strategy is to be followed and whether the value is atypical. d) Representativity. This review involves analyzing whether the statistical distribution of the proportions of prices of the collected sample163 (at the level of prices of variety-establishment) differs significantly from the distribution of the intended sample164. Existing statistical methods are used to compare the descriptive statistics of the intended sample165 with those of the collected samples (percentages are compared by establishments, sales sizes, etc.). When the statistic is outside the tolerance limits, the variety is not well represented and must be imputed according to the defined criteria of a missing price because the quantity of information used is insufficient to obtain a CPI within the defined level of quality. When the calculated statistic is within the limits of tolerance, the variety is well represented and, with the collected information, a CPI with the defined level of quality can be obtained.

160 OIT et al. (2006), párrafos 9.154-9.159, pp. 207-208. 161 This method is also used when the current month is compared with the previous month. 162 For some products, this range is narrower. 163 The sample distribution is generated with information from each period t. 164 The sample distribution was defined at the beginning of the process of price collection. 165 This is following the recommendation of Ramsay and Hewitt (2005).

Chapter 13. Dissemination of the index

INE publishes the index and its monthly, cumulative, and annual variations, as well as their respective impacts. This information is available to all users on the institutional website at 8.00 a.m. within the first eight days of the month following the month of price collection. The calendar of CPI publications is available on the website and is updated at the end of each year. Each month, INE publishes the general CPI, the breakdown of the CPI by division, group, class, subclass, and product, in addition to the historical and reference series166. In INE’s publications, the figures are rounded to two decimal places for indices, to one decimal place for variations, and to three decimal places for impacts. In addition, the weightings used to construct the aggregates are rounded to five decimals. Finally, all calculations of the indicator use twelve decimals. Because of these practices, differences may occur between the calculations performed by users and those published by INE, particularly when the variation of the CPI is calculated through monthly impacts, because users have access to an index with two decimals, while INE uses twelve. The CPI base 2018=100 became effective in January 2019. Throughout 2018, INE gathered information to be used for the new the reference year. The first official variation of the new base year was published on 8 February 2019 at 08:00 a.m. The publication of the next rebasing of the CPI will take place in 2024, the year in which the methodology, the basket of products, and their respective weights will be updated (CPI base 2023=100). The most important methodological changes are made during the rebasing, but the CPI is constantly studied to identify opportunities for improvement167. Thus, whenever concepts, definitions, and methodologies used in the collection and elaboration of the index are revised or redesigned, the public is informed of the changes in a timely manner by the publication of Technical Supplements168. These documents update the methodology presented in the CPI manual and will be official once they are published on the institutional website. Thus, INE reserves the right to organize committees of experts and/or users whenever a methodological change is likely to be implemented. These committees are to keep users, experts, and the public informed of any modifications in the methodology of the CPI169. Finally, whenever users need to adjust monetary figures from one period to another, they are encouraged to make use of the CPI Calculator available on the institutional website.

Chapter 14. Program of improvement of the index

In its process of continuous improvement, INE is committed to maintaining a frequently updated CPI.

166 All these series are freely available on the institutional website (www.ine.cl). 167 In most cases, this research will be documented in working papers published at the following location: http://www.ine.cl/inicio/documentos-de-trabajo/precios 168 Technical supplements are also used when a law is modified that affects products of the basket and that requires a rapid change in the calculation methodology of the CPI. 169 The documentation of each Committee of Experts on methodological and operational topics of the base year 2018=100 is published on the institutional website at: http://www.ine.cl/estad%C3%ADsticas/precios/ipc

An index that is not periodically updated loses its ability to provide correct signals of the evolution of prices. For this reason, since 2009, the CPI has been updated every five years170, in accord with the commitment made by Chile with the OECD. While the base 2018=100 remains valid, periodic revisions and updates of hedonic models will continue, both of which will occur every six months. In addition, methodological studies will extend the application of quality adjustment through hedonic models to the rest of the products in division 3, clothing and footwear. In this division, contact with the retail sector will be strengthened in order to keep the varieties and market information as up to date as possible and to keep the various imputation methods under constant analysis. The application of quality adjustment through hedonic models will also be studied for the rest of the products of the CPI 2018=100 basket. Following international recommendations, INE will continue striving to better represent the tastes and preferences of consumers in their purchasing decisions and to better understand the market structure associated with the product under analysis, especially by the use of weights below the level of product. On the other hand, during the validity of the current base 2018, studies will monitor changes in seasonality that could affect the behavior of prices of certain products belonging to the CPI basket. The changes may be due, for example, to climatic factors (seasonal fruits and vegetables), the emergence of new preferences (online subscription services, package tours), or technological changes (electronic products). Efforts will also continue to update the sample sizes and renovation processes of household sample panels for products such as domestic service and rents. These are considerable challenges because of the possible depletion of informants. Thus, the aim is to constantly improve representativity and avoid obsolescence of the samples used in the index. Finally, recurrent contact will be maintained with the principal suppliers of each market, for example, with health centers (hospitals, clinics, and others), telecommunications companies, and the principal suppliers of fresh fruits and vegetables (Lo Valledor, among others). The aim of this contact is to update the basket whenever any changes are made. INE will also evaluate the possible effects and progression of the law on free education and its implications for the measurement of the CPI.

Chapter 15. Glossary171

Acquisition: The moment in which the seller who supplies goods and services is actually paid. It is not necessarily the time when the expenses occur. Acquisitions can be divided into two kinds:  Acquisition of a good: The moment in which the legal or effective economic ownership of the good passes to the consumer.  Acquisition of a service: The moment in which a service provided by a producer is completed to the satisfaction of the consumer.

170 The first official variation of base 2009=100 was published in February 2010, of base 2013=100 in February 2014, and of base 2018=100 in February 2019. 171 The majority of definitions are taken from OIT et al (2006), pp. 513-521 and CE et al (2016).

Acquisitions approach: In the context of establishing a CPI, the period in which a household purchases products, regardless of the period in which it consumes them (in whole or in part) or pays for them. Aggregation: Process of combining or adding sets of values, prices, or indices to obtain a total of values or a set of elements. An aggregate is the result of the process of aggregation. Base period: The period with which all other periods are compared. However, the term has additional meanings, including the following three elements: . Index reference period: The period for which the value of the CPI is set at 100. . Price reference period: A period of defined duration whose prices are compared with other periods. The prices of the price reference period appear in the denominators, or quotients, that are used to calculate the index. The price reference period is often designated as period 0. . Weight reference period: The period for which the expenditure shares serve as the weights for a CPI. Basket: A specified set of goods and services. In the context of the CPI, the set may consist of the quantities of consumption goods and services actually acquired by households in a given period, or may consist of hypothetical quantities. Carry forward: Process in which a missing price in some period is imputed as being equal to the last observed price of the good or service. Characteristics: The tangible and intangible attributes of a good or service that serve to identify it and enable it to be classified. Characteristics that contribute to the determination of prices are known as constituent characteristics or price determinants. Collective household: A group of unrelated people who share the dwelling or part of a dwelling and who make common provision for reasons of health, work, religion, study, discipline, etc. Comparable variety: A variety that replaces another that is not present in an establishment at the moment of price collection. A comparable variety has similar attributes (characteristics) and is of similar quality to the variety it replaces. Component: A subset of goods and services that form a defined aggregate. Consumers: An individual person living alone or groups of persons living together who form households. Durable good: A good that creates the necessary services to satisfy the wants and needs of consumers over time. A durable good disappears slowly as it is consumed, usually over several years. Elementary aggregate: The smallest aggregate of a minimum value and of relative importance for the purposes of the CPI. The elementary aggregate is an aggregate of prices and does not have weighting within the structure of the basket. Expenditures: Sums that purchasers pay, or agree to pay, to sellers in exchange for goods or services that sellers provide to them or to other institutional units designated by the purchasers. Good: A physical object for which there is demand. A good must be subject to ownership rights (appropriable), and its possession must be transferable between agents. Hedonic method: A regression model in which the market prices of different products are expressed as a function of their characteristics. Each regression coefficient is treated as an

estimate of the marginal contribution of that characteristic to the total price (all else remaining constant). The estimates may be used to predict the price of a new product whose combination of characteristics differ from any existing product on the market, enabling an estimate to be made of the effects of quality changes on prices. Household: An individual living alone or a group of persons living together who make common provision for food and other essentials for living. Imputation: A procedure that assigns to an unreported variable the variation of another similar variable or of other more or less similar variables. International Classification of Individual Consumption according to Purpose (COICOP): The functional categorization of the System of National Accounts (SNA). The COICOP enables a clear distinction to be made between goods and services and provides statistics that, according to experience, are of general interest for a wide variety of analytic uses and that provide users the means to restructure key aggregates of the SNA for particular kinds of analysis. Goods and services are divided into twelve divisions (the highest level of aggregation), which are formed from the aggregation of groups. The groups are composed of classes, and classes are further divided into subclasses. Subclasses are the result of the aggregation of products, which consist, in turn, of an aggregation of varieties (the elementary aggregate). Laspeyres price index: An index that uses a vector of fixed weights. The index is associated with the basket of goods and services of a base period and is calculated in the following manner: 푛 1 0 0 1 0 1 ∑푖=1 푝푖 푞푖 푃퐿푎푠푝푒푦푟푒푠(푝 , 푝 , 푞 , 푞 ) = 푛 0 0 ∑푖=1 푝푖 푞푖 Where: 1 푝푖 : Price i period (1) of item 푖. 0 푝푖 : Price in the base period (0) of item 푖. 0 푞푖 : Quantity of item i acquired in the base period (0). 푛: Total number of items in the basket. Linking: The process of connecting or uniting two series of price indices that overlap in one or more periods. Non-comparable variety: A variety that replaces another that is not present at the moment of price collection. A non-comparable variety has different attributes (characteristics) and is of a different quality from the variety it replaces. Non-durable good: A good that, once consumed, disappears or is destroyed. For food, there is a class of non-durable goods that disappear even when not consumed; these goods are known as perishable goods. Non-perishable good: A non-durable consumer good that has received special treatment to extend its life. These goods do not need refrigeration and usually last more than one month. Non-probability sampling: A non-random selection of outlets or products made on the basis of knowledge or judgment of the person in charge. This concept is also known as “directed sampling” or “sampling by expert judgment”. Outlet: The place of contact between the supplier of the products and/or services and a consumer. It is also known as a “retail outlet” or “retail store” although it may include wholesale outlets that sell directly to the consumer.

Payments approach: In the context of the establishment of a CPI, the period in which a household actually pays for a product. Perishable good: A non-durable good that decays rapidly and therefore needs refrigeration or freezing to extend its life (expiration date of less than one month). In general, fresh food is of this category. Price: The nominal value (in monetary units) of the transaction of a good or service. The price may or may not include home delivery, but it must include all applicable indirect taxes or specific taxes, non-discriminatory discounts, and discounts not subject to the use of a specific means of payment. Price enumerator: An official of INE charged with collecting the prices of goods and services that form part of the CPI basket. Private household: A group of one or more persons who, regardless of kinship, make a common provision of food and budget and who live in the same dwelling or part of it. Price imputation: A procedure that assigns to a variety for which no price is available the price variation of another variety or other varieties with more or less similar characteristics. Price relative: The ratio of the price of an individual product in one period and the same product in any other period. Price to be entered (for calculation): The price entered in the calculation of the CPI base 2018=100, including all taxes, discounts, and promotions that permit unrestricted access to the good or service. The price must be of universally accessible, that is, the price at which anyone can acquire the good or service. Probability sampling: The random selection of a sample of units, such as outlets or products, in such a way that each unit in the universe has a known (non‐zero) probability of selection. Product: Generic term for a good or service that has a defined purpose and for which there is an expenditure weight. For the CPI, a product represents an elementary aggregate. Products that require special calculation: Products whose price collection is not from a direct observation of the source, thus these products require a previously determined ad hoc treatment that may consist of the creation of standard bills or of a sum of components. Products that require special treatment: Products that, within the aggregation structure, use a weight below the level of product or panels of households to measure the change in price. Quality adjustment: Adjustment to the variation in the price of a product whose characteristics change over time. The purpose is to remove the contribution of change in the characteristics of the observed price. The adjustment is needed when the price of a replacement product must be compared with the price of the product it replaces. Rebasing: Rebasing may have different meanings in different contexts. It may mean: . Changing the weights used for a series of indices . Changing the price reference period used for a series of indices . Changing the index reference period for a series of indices. Rebasing may involve a simultaneous change of the weights and the price reference period. Registration: The process of verification of goods and services available in establishments, companies, and households.

Representative product: A product, or category of products, that accounts for a significant proportion of total expenditures within an elementary aggregate. Reweighting: Replacing the weights used in an index with a new set of weights. Sales price: Price whose level has been temporarily modified in an establishment (or in several of them) because of a promotion. Sampling frame: A list of units (companies, establishments, dwellings, stores, etc.) in the universe from which a sample can be taken for statistical purposes. Seasonal products: Products that (a) are not available in certain seasons (months) of the year, (b) are available all year, but their prices and the quantity available are subject to regular fluctuations that are synchronized with the season or time of year, or (c) are composed of seasonal varieties whose presence in the market is approximately four months. Specification: Description or list of the characteristics that can be used to identify a sampled product whose price is to be collected. A “tight” specification is a precise description of an item intended to limit the range of items from which the enumerator may choose. A “loose” specification is a generic description of a range of items that allows the enumerator some discretion in selecting an item for pricing. Standard bill: The value that a household must pay for the consumption of service. The value consists of a set n of compulsory and supplementary items (components) that depend on prior consumption. Usually, the value includes both a fixed charge that is independent of prior consumption and one or more variable items that depend on prior consumption. For example, in the case of services such as water and electricity, the value to be paid has a fixed component (that does not depend on prior consumption) and another variable (that depends on monthly consumption). Substitute good/service: A product that has similar characteristics to those of another product and that can be used to satisfy the same needs or tastes of the consumer. Temporary product: Products that are not universally (or generally) available all year. The period for the beginning and end of price collection is defined every year. Transfer: A transaction in which one institutional unit provides a good, service, or asset without receiving any good, service, or asset as counterpart. Transfer in kind: The transfer of ownership of a good or asset other than money, or in the provision of a service, without receiving any counterpart in return. Transfer in money: Payment in money or the provision of a transferable deposit by a unit to another unit, without receiving any counterpart in return. Urban and rural: The distinction used in the census definition, which indicates that an “urban entity” is a set of concentrated dwellings with more than 2,000 inhabitants, or between 1,001 and 2,000 inhabitants with 50% or more of its economically active population engaged in secondary or tertiary activities. In an exceptional case, centers that fulfill tourist and recreational functions and that have more than 250 concentrated dwellings but that do not meet the population requirement are considered to be urban entities. Uses approach: In the context of the establishment of a CPI, the period in which consumption expenditure is identified with the consumption of goods and services actually used by a household to satisfy its needs and wants.

Variety: A good or service that forms the basic or elementary unit of the CPI basket. Variety is defined according to a set of pre-established attributes or specifications such as brand, description, size, contents, packaging, and origin, among other specific characteristics. Weights: The proportions that in the CPI refer to the relative household expenditure of the products consumed by the household.

Chapter 16. Bibliography

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Chapter 17. Appendices

Appendix 1. Products of the 2018 basket that changed in description from the 2013 basket

Code CPI Code CPI Description CPI 2013 Description CPI 2018 2013=100 2018=100

3.1.2.3.3 Shirts and T-shirts for children 3.1.2.3.3 Shirts, blouses, and T-shirts for children

3.2.1.3.3 Seasonal footwear for children 3.2.1.3.3 School footwear

5.3.1.1.4 Microwave ovens 5.3.1.1.4 Electric ovens and microwave ovens 5.5.1.1.1 Electric tools 5.5.1.1.1 Electric tools and accessories 5.5.1.1.2 Hand tools 5.5.1.1.2 Hand tools and accessories 9.3.1.1.2 Sports tickets 9.3.1.1.2 Entrance fees for sporting events 9.3.2.1.2 Tickets for entertainment events 9.3.2.1.2 Entrance fees for cultural events 12.2.2.1.1 Wallets and bags 12.2.2.1.1 Articles for the transport of personal effects 12.2.2.1.2 Baby carriages 12.2.2.1.2 Articles for the transport of infants 12.3.1.1.1 Automobile insurance 12.3.1.1.1 Insurance

Source: National Statistics Institute (INE).

Appendix 2. Products of the 2013 basket that were combined to form new products in the 2018 basket

Code CPI Code CPI 2013=100 Description CPI 2013 Description CPI 2018 2018=100 3.1.2.2.2 Skirts and trousers for women Trousers, skirts, and dresses for 3.1.2.2.2 3.1.2.2.4 Outfits and dresses for women women 3.1.2.4.1 Coats for infants 3.1.2.4.2 Outfits for infants 3.1.2.3.6 Clothing for infants 3.1.2.4.3 Underwear and sleepwear for infants 3.1.2.5.1 School uniforms 3.1.2.4.1 School uniforms and sportswear 3.1.2.5.2 School sportswear 3.1.4.1.1 Clothing cleaning services 3.1.4.1.1 Cleaning and repair of clothing 3.1.4.1.2 Clothing repair services 3.2.1.1.2 Shoes for men 3.2.1.1.2 Shoes for men 3.2.1.1.3 Seasonal footwear for men 5.1.1.2.2 Lamps 5.1.1.2.2 Ornamental articles 5.1.1.2.3 Ornamental articles 5.3.2.1.1 Small kitchen appliances 5.3.2.1.1 Small kitchen appliances 5.3.2.1.3 Food processors 5.4.1.1.2 Pots and pans 5.4.1.1.2 Kitchen utensils 5.4.1.1.3 Kitchen utensils 5.6.1.1.4 Floor cleaners 5.6.1.1.4 Household cleaners 5.6.1.1.5 Multi-purpose cleaners 5.6.1.2.1 Floor cleaning articles Articles for cleaning of bathroom and 5.6.1.2.1 Articles for cleaning 5.6.1.2.2 kitchen 9.1.4.1.1 Digital music and film 9.1.4.1.1 Digital storage devices 9.1.4.1.2 Digital storage devices Breakfasts consumed outside the 11.1.1.1.1 11.1.1.1.1 Food consumed outside the home home

Code CPI Code CPI 2013=100 Description CPI 2013 Description CPI 2018 2018=100 Lunches and dinners consumed 11.1.1.1.2 outside the home Afternoon tea consumed outside the 11.1.1.1.3 home 11.1.1.2.1 Empanadas 11.1.1.2.2 Chips 11.1.1.2.1 Take-out food 11.1.1.2.3 Meals

Source: National Statistics Institute (INE)

Appendix 3. Distribution of the national sample size of the product, by region

Once the number of prices to be collected for each product at the national level has been determined, the second phase is distributing to the regional level the number of prices to be collected. This second phase has two steps, which are described below.

. Distribution of the sample size at the level of macro-zone.

Once the theoretical sample size of the products at national level has been determined (i.e., the number of prices to be collected), the sample size is distributed by macro-zones at the national level. For this purpose, the information on macro-zone expenditure (i.e., the macro-zone weighting) is obtained from the VIII EPF for each product. It should be noted that the Metropolitan Region is an independent macro-zone. The regions are distributed in four macro-zones as follows: . Northern Macro-zone consists of the regions of Arica y Parinacota, Tarapacá, Antofagasta, Atacama, and Coquimbo. . Central Macro-zone consists of the regions of Valparaíso, O’Higgins, Maule, Ñuble, and Biobío. . Southern Macro-zone consists of the regions of la Araucanía, los Lagos, los Ríos, Aysén, and Magallanes. . Metropolitan Macro-zone consists of the Metropolitan Region. The procedure for distributing the sample of each product at the level of macro-zone is as follows:

푃푝푚 푛푝푚 = 푛푝 4 ∑푚=1 푃푝푚

Where 푛푝푚 is the sample size of prices of product 푝 in macro-zone 푚, 푛푝 is the national sample size of prices for product 푝, and 푃푝푚 is the weighting of product 푝 in macro-zone 푚 relative to household expenditure in the EPF. Once the sample of each product in the macro-zone has been assigned, it is distributed on a regional level.

. Distribution of the sample size at the regional level.

In order to distribute the number of prices to be collected at the regional level, information on the population of the regional capitals and communes covered in the CPI is considered. This information comes from the results of the last housing and population census and from information on projections of vital statistics of the population. Because data from the VIII EPF is not representative on a regional level, it cannot be used for this purpose. The distribution of the central macro-zone includes the weight of the regional capital and conurbation of the new Ñuble region, which includes the conurbation zone of Chillán and Chillán Viejo. Lastly, the sample sizes of the products at the national level for each of the macro-zones are distributed among all the regions, according to the following equation:

푃푝푟 푛푝푟 = 푛푝푚 16 ∑푟=1 푃푝푟

Where 푛푝푟 is the sample size of prices for product 푝 in region 푟, npm is the sample size of prices for product 푝 in macro-zone 푚, and Ppr represents the weighting relative to the population of region 푟 of product 푝.

Appendix 4. Products that use the hedonic model and their main components

D G C SC P DESCRIPTION Principal variables 3 1 2 1 1 COATS FOR MEN 3 1 2 1 2 TROUSERS AND SHORTS FOR MEN 3 1 2 1 3 SHIRTS AND T-SHIRTS FOR MEN 3 1 2 1 4 UNDERWEAR AND SLEEPWEAR FOR MEN 3 1 2 2 1 COATS FOR WOMEN

3 1 2 2 2 TROUSERS AND SKIRTS FOR WOMEN Variables of origin (mainly Asian), variables of 3 1 2 2 2 OUTFITS AND DRESS FOR WOMEN composition (natural or artificial material), characteristics of the garment (length, collar, 3 1 2 2 3 BLOUSES AND T-SHIRTS FOR WOMEN sleeves), fabric accessories (prints, sequins, etc.) and 3 1 2 2 5 UNDERWEAR AND SLEEPWEAR FOR WOMEN brands 3 1 2 3 1 COATS FOR CHILDREN 3 1 2 3 2 TROUSERS, SKIRTS, AND DRESSES FOR CHILDREN 3 1 2 3 5 UNDERWEAR AND SLEEPWEAR FOR CHILDREN 3 1 2 3 6 COATS FOR INFANTS 3 1 2 3 6 OUTFITS FOR INFANTS 3 2 1 1 1 SPORTS FOOTWEAR FOR MEN 3 2 1 1 2 SHOES FOR MEN 3 2 1 1 2 SEASONAL FOOTWEAR FOR MEN 3 2 1 2 1 SPORTS FOOTWEAR FOR WOMEN Variables of origin (mainly Asian), variables of 3 2 1 2 2 SHOES FOR WOMEN composition (leather, textile or synthetic), footwear characteristics (length, type of heel, etc.), footwear 3 2 1 2 3 SEASONAL FOOTWEAR FOR WOMEN accessories (prints, sequins, etc.) and brands 3 2 1 3 1 SPORTS FOOTWEAR FOR CHILDREN 3 2 1 3 2 SHOES FOR CHILDREN 3 2 1 3 3 SCHOOL FOOTWEAR

D G C SC P DESCRIPTION Principal variables Storage, operating system, internal memory, 8 1 1 1 1 MOBILE TELEPHONE DEVICES information transfer technology between different devices, physical dimensions 8 2 1 1 3 BUNDLED TELECOMMUNICATION SERVICES Decoder quality, quantity and quality of channels 8 2 1 1 4 MOBILE TELEPHONE SERVICES Connection speed, traffic fees, minutes.

9 1 1 1 1 TELEVISION SETS Screen size, image quality, type of connection (Wi-Fi, USB, HDMI) 9 1 2 1 1 PHOTOGRAPHIC CAMERAS Image processing quality, image quality, type of connection (Wi-Fi, USB, HDMI) 9 1 3 1 1 COMPUTERS Internal memory, processor, connection (USB, HDMI), video card

Note: The variables in this table have been significant in models over time and include a history of at least three years of calculation of models.

Source: National Statistics Institute (INE).

Appendix 5. CPI basket, base year 2018=100

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 DIVISION 1 0 0 0 0 FOOD AND NON-ALCOHOLIC BEVERAGES 19.30131 GROUP 1 1 0 0 0 FOOD 17.13731 CLASS 1 1 1 0 0 BREAD AND CEREALS 4.03457 SUBCLASS 1 1 1 1 0 RICE 0.18033 PRODUCT 1 1 1 1 1 RICE 0.18033 SUBCLASS 1 1 1 2 0 FLOUR AND CEREALS 0.31595 PRODUCT 1 1 1 2 1 FLOUR 0.09428 PRODUCT 1 1 1 2 2 CEREALS 0.22167 SUBCLASS 1 1 1 3 0 BREAD AND OTHER BAKERY PRODUCTS 3.27246 PRODUCT 1 1 1 3 1 BREAD 2.08381 PRODUCT 1 1 1 3 2 BISCUITS 0.42102 PRODUCT 1 1 1 3 3 PASTRIES 0.56276 PRODUCT 1 1 1 3 4 PREPARED SAVORY DOUGHS 0.10138 PRODUCT 1 1 1 3 5 SNACKS 0.10349 SUBCLASS 1 1 1 4 0 PASTA 0.26583 PRODUCT 1 1 1 4 1 PASTA 0.26583 CLASS 1 1 2 0 0 MEATS 4.39152 SUBCLASS 1 1 2 1 0 FRESH, CHILLED, OR FROZEN BOVINE MEAT 1.83118 PRODUCT 1 1 2 1 1 BOVINE MEAT 1.83118 SUBCLASS 1 1 2 2 0 FRESH, CHILLED, OR FROZEN PORK 0.45693 PRODUCT 1 1 2 2 1 PORK 0.45693 SUBCLASS 1 1 2 3 0 FRESH, CHILLED, OR FROZEN POULTRY 0.98958 PRODUCT 1 1 2 3 1 TURKEY POULTRY 0.07385 PRODUCT 1 1 2 3 2 CHICKEN POULTRY 0.91573 SUBCLASS 1 1 2 4 0 PROCESSED MEAT 1.11383 PRODUCT 1 1 2 4 1 CURED MEAT 0.98478 PRODUCT 1 1 2 4 2 BURGERS 0.12905 CLASS 1 1 3 0 0 FISH AND SEAFOOD 0.57242 SUBCLASS 1 1 3 1 0 FRESH, CHILLED, OR FROZEN FISH 0.26577 PRODUCT 1 1 3 1 1 FISH 0.26577 SUBCLASS 1 1 3 2 0 FRESH, CHILLED, OR FROZEN SEAFOOD 0.08082 PRODUCT 1 1 3 2 1 SEAFOOD 0.08082 SUBCLASS 1 1 3 3 0 CANNED FISH AND SEAFOOD 0.22583 PRODUCT 1 1 3 3 1 CANNED FISH 0.20353

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 PRODUCT 1 1 3 3 2 CANNED SEAFOOD 0.02230 CLASS 1 1 4 0 0 DAIRY PRODUCTS, CHEESE, AND EGGS 2.42231 SUBCLASS 1 1 4 1 0 MILK, ALL KINDS 0.72248 PRODUCT 1 1 4 1 1 POWDERED MILK 0.18644 PRODUCT 1 1 4 1 2 LIQUID MILK 0.45256 PRODUCT 1 1 4 1 3 PROCESSED MILK 0.08348 SUBCLASS 1 1 4 2 0 YOGHURT AND MILK-BASED DESSERTS 0.44962 PRODUCT 1 1 4 2 1 YOGHURT 0.37669 PRODUCT 1 1 4 2 2 MILK-BASED DESSERTS 0.07293 SUBCLASS 1 1 4 3 0 CHEESE 0.84248 PRODUCT 1 1 4 3 1 CHEESE 0.84248 SUBCLASS 1 1 4 4 0 EGGS 0.40773 PRODUCT 1 1 4 4 1 EGGS 0.40773 CLASS 1 1 5 0 0 OILS AND FATS 0.53071 SUBCLASS 1 1 5 1 0 BUTTER AND MARGARINE 0.23888 PRODUCT 1 1 5 1 1 BUTTER 0.16426 PRODUCT 1 1 5 1 2 MARGARINE 0.07462 SUBCLASS 1 1 5 2 0 EDIBLE OILS 0.29183 PRODUCT 1 1 5 2 1 VEGETABLE OILS 0.29183 CLASS 1 1 6 0 0 FRUIT 0.97316 SUBCLASS 1 1 6 1 0 FRESH, CHILLED, OR FROZEN FRUIT 0.79334 PRODUCT 1 1 6 1 1 APPLES 0.11296 PRODUCT 1 1 6 1 2 ORANGES 0.11190 PRODUCT 1 1 6 1 3 PEARS 0.03486 PRODUCT 1 1 6 1 4 BANANAS 0.14182 PRODUCT 1 1 6 1 5 SEASONAL FRUITS 0.39180 SUBCLASS 1 1 6 2 0 NUTS, DRIED FRUIT, AND CANNED FRUIT 0.17982 PRODUCT 1 1 6 2 1 NUTS AND FRIED FRUIT 0.13142 PRODUCT 1 1 6 2 2 CANNED FRUIT 0.04840 CLASS 1 1 7 0 0 VEGETABLES, LEGUMES, AND TUBERS 2.58630 SUBCLASS 1 1 7 1 0 FRESH, CHILLED, FROZEN, OR PRESERVED VEGETABLES 1.92322 PRODUCT 1 1 7 1 1 CHARD AND SPINACH 0.04289 PRODUCT 1 1 7 1 2 ONIONS AND CHIVES 0.13303 PRODUCT 1 1 7 1 3 LETTUCE 0.17469 PRODUCT 1 1 7 1 4 LEMONS 0.13543 PRODUCT 1 1 7 1 5 AVOCADOS 0.33389 PRODUCT 1 1 7 1 6 BELL PEPPERS AND CHILI PEPPERS 0.05160 PRODUCT 1 1 7 1 7 TOMATOES 0.32495 PRODUCT 1 1 7 1 8 CARROTS 0.06898 PRODUCT 1 1 7 1 9 PUMPKIN 0.08560 PRODUCT 1 1 7 1 10 ZUCCHINI 0.03675 PRODUCT 1 1 7 1 11 SEASONAL VEGETABLES 0.30569 PRODUCT 1 1 7 1 12 FROZEN VEGETABLES 0.11295 PRODUCT 1 1 7 1 13 CANNED VEGETABLES 0.04367 PRODUCT 1 1 7 1 14 PICKLED VEGETABLES 0.07310 SUBCLASS 1 1 7 2 0 DRIED LEGUMES 0.14401 PRODUCT 1 1 7 2 1 LEGUMES 0.14401 SUBCLASS 1 1 7 3 0 TUBERS AND DERIVATIVES 0.51907 PRODUCT 1 1 7 3 1 POTATOES 0.33620 PRODUCT 1 1 7 3 2 FROZEN AND DEHYDRATED POTATOES 0.05833 PRODUCT 1 1 7 3 3 FROZEN, CHIPPED POTATOES 0.12454 CLASS 1 1 8 0 0 SUGAR, JAM, HONEY, CHOCOLATE, AND SUGAR CONFECTIONERY 0.92862 SUBCLASS 1 1 8 1 0 SUGAR AND SWEETENER 0.17443 PRODUCT 1 1 8 1 1 SUGAR 0.13136 PRODUCT 1 1 8 1 2 SWEETENER 0.04307 SUBCLASS 1 1 8 2 0 JAM, MANJAR (SWEETENED MILK SPREAD), AND OTHER SWEET SPREADS 0.14835

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 PRODUCT 1 1 8 2 1 JAMS 0.07621 PRODUCT 1 1 8 2 2 MANJAR (SWEETENED MILK SPREAD) AND OTHER SWEET SPREADS 0.07214 SUBCLASS 1 1 8 3 0 CANDY, CHOCOLATE, AND OTHER CONFECTIONARY PRODUCTS 0.35221 PRODUCT 1 1 8 3 1 CANDY AND CHEWING GUM 0.09733 PRODUCT 1 1 8 3 2 CHOCOLATE 0.25488 SUBCLASS 1 1 8 4 0 ICE CREAM, ALL KINDS 0.25363 PRODUCT 1 1 8 4 1 ICE CREAM 0.25363 CLASS 1 1 9 0 0 OTHER FOOD PRODUCTS 0.69770 SUBCLASS 1 1 9 1 0 SALT, HERBS, SPICES, AND CONDIMENTS 0.12217 PRODUCT 1 1 9 1 1 SALT 0.02511 PRODUCT 1 1 9 1 2 HERBS, SPICES, AND CONDIMENTS 0.09706 SUBCLASS 1 1 9 2 0 SAUCES AND SEASONINGS 0.29939 PRODUCT 1 1 9 2 1 SAUCES 0.10893 PRODUCT 1 1 9 2 2 SEASONINGS 0.19046 SUBCLASS 1 1 9 3 0 SOUPS AND BROTHS, BABY FOOD, AND NON-DAIRY DESSERTS 0.27614 PRODUCT 1 1 9 3 1 SOUPS AND BROTHS 0.08700 PRODUCT 1 1 9 3 2 BABY FOOD 0.10370 PRODUCT 1 1 9 3 3 NON-DAIRY DESSERTS 0.08544 GROUP 1 2 0 0 0 NON-ALCOHOLIC BEVERAGES 2.16400 CLASS 1 2 1 0 0 COFFEE, TEA, AND COCOA 0.38216 SUBCLASS 1 2 1 1 0 COFFEE AND SUBSTITUTES 0.15522 PRODUCT 1 2 1 1 1 COFFEE AND SUBSTITUTES 0.15522 SUBCLASS 1 2 1 2 0 TEA 0.17671 PRODUCT 1 2 1 2 1 TEA 0.17671 SUBCLASS 1 2 1 3 0 COCOA AND CHOCOLATE-BASED POWDER 0.05023 PRODUCT 1 2 1 3 1 FLAVORINGS FOR MILK PRODUCTS 0.05023 CLASS 1 2 2 0 0 MINERAL WATER, SOFT DRINKS, AND FRUIT JUICES 1.78184 SUBCLASS 1 2 2 1 0 MINERAL WATER AND PURIFIED WATER 0.21102 PRODUCT 1 2 2 1 1 BOTTLED WATER 0.21102 SUBCLASS 1 2 2 2 0 SOFT DRINKS 1.14376 PRODUCT 1 2 2 2 1 SOFT DRINKS 1.08369 PRODUCT 1 2 2 2 2 ISOTONIC AND ENERGY DRINKS 0.06007 SUBCLASS 1 2 2 3 0 LIQUID JUICES AND JUICE POWDER 0.42706 PRODUCT 1 2 2 3 1 LIQUID JUICES 0.32951 PRODUCT 1 2 2 3 2 JUICE POWDER 0.09755 DIVISION 2 0 0 0 0 ALCOHOLIC BEVERAGES AND TOBACCO 4.77767 GROUP 2 1 0 0 0 ALCOHOLIC BEVERAGES 2.87080 CLASS 2 1 1 0 0 SPIRITS AND LIQUORS 0.50926 SUBCLASS 2 1 1 1 0 SPIRITS AND LIQUORS 0.50926 PRODUCT 2 1 1 1 1 PISCO 0.23562 PRODUCT 2 1 1 1 2 RUM 0.07718 PRODUCT 2 1 1 1 3 WHISKY 0.14032 PRODUCT 2 1 1 1 4 VODKA 0.05614 CLASS 2 1 2 0 0 WINES 0.96935 SUBCLASS 2 1 2 1 0 WINES, ALL KINDS 0.96935 PRODUCT 2 1 2 1 1 WINE 0.86682 PRODUCT 2 1 2 1 2 SPARKLING WINE 0.10253 CLASS 2 1 3 0 0 BEER 1.39219 SUBCLASS 2 1 3 1 0 BEER, ALL KINDS 1.39219 PRODUCT 2 1 3 1 1 BEER 1.39219 GROUP 2 2 0 0 0 TOBACCO 1.90687 CLASS 2 2 1 0 0 TOBACCO 1.90687 SUBCLASS 2 2 1 1 0 CIGARETTES, ALL KINDS 1.90687 PRODUCT 2 2 1 1 1 CIGARETTES 1.90687 DIVISION 3 0 0 0 0 CLOTHING AND FOOTWEAR 3.50596 GROUP 3 1 0 0 0 CLOTHING 2.30493

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 CLASS 3 1 1 0 0 CLOTHING MATERIALS 0.03406 SUBCLASS 3 1 1 1 0 CLOTHING FABRICS, ALL KINDS 0.03406 PRODUCT 3 1 1 1 1 CLOTHING FABRICS 0.03406 CLASS 3 1 2 0 0 CLOTHING 2.09326 SUBCLASS 3 1 2 1 0 CLOTHING FOR MEN 0.64714 PRODUCT 3 1 2 1 1 COATS FOR MEN 0.17216 PRODUCT 3 1 2 1 2 TROUSERS AND SHORTS FOR MEN 0.23837 PRODUCT 3 1 2 1 3 SHIRTS AND T-SHIRTS FOR MEN 0.19681 PRODUCT 3 1 2 1 4 UNDERWEAR AND SLEEPWEAR FOR MEN 0.03980 SUBCLASS 3 1 2 2 0 CLOTHING FOR WOMEN 0.76977 PRODUCT 3 1 2 2 1 COATS FOR WOMEN 0.20708 PRODUCT 3 1 2 2 2 TROUSERS, SKIRTS, AND DRESSES FOR WOMEN 0.28385 PRODUCT 3 1 2 2 3 BLOUSES AND T-SHIRTS FOR WOMEN 0.16895 PRODUCT 3 1 2 2 4 SPORTSWEAR AND SWIMWEAR FOR WOMEN 0.02628 PRODUCT 3 1 2 2 5 UNDERWEAR AND SLEEPWEAR FOR WOMEN 0.08361 SUBCLASS 3 1 2 3 0 CLOTHING FOR CHILDREN 0.27728 PRODUCT 3 1 2 3 1 COATS FOR CHILDREN 0.05708 PRODUCT 3 1 2 3 2 TROUSERS, SKIRTS, AND DRESSES FOR CHILDREN 0.07989 PRODUCT 3 1 2 3 3 SHIRTS, BLOUSES, AND T-SHIRTS FOR CHILDREN 0.05971 PRODUCT 3 1 2 3 4 SPORTSWEAR, SHORTS, AND SWIMWEAR FOR CHILDREN 0.03397 PRODUCT 3 1 2 3 5 UNDERWEAR AND SLEEPWEAR FOR CHILDREN 0.02386 PRODUCT 3 1 2 3 6 CLOTHING FOR INFANTS 0.02277 SUBCLASS 3 1 2 4 0 SCHOOL CLOTHING 0.39907 PRODUCT 3 1 2 4 1 SCHOOL UNIFORMS AND SPORTSWEAR 0.39907 CLASS 3 1 3 0 0 ARTICLES AND ACCESSORIES FOR CLOTHING 0.11757 SUBCLASS 3 1 3 1 0 ARTICLES AND ACCESSORIES FOR CLOTHING 0.11757 PRODUCT 3 1 3 1 1 ARTICLES FOR CLOTHING REPAIR 0.03652 PRODUCT 3 1 3 1 2 CLOTHING ACCESSORIES 0.08105 CLASS 3 1 4 0 0 CLEANING AND REPAIR OF CLOTHING 0.06004 SUBCLASS 3 1 4 1 0 CLEANING AND REPAIR OF CLOTHING 0.06004 PRODUCT 3 1 4 1 1 CLEANING AND REPAIR OF CLOTHING 0.06004 GROUP 3 2 0 0 0 FOOTWEAR 1.20103 CLASS 3 2 1 0 0 SHOES AND OTHER FOOTWEAR 1.20103 SUBCLASS 3 2 1 1 0 FOOTWEAR FOR MEN 0.38761 PRODUCT 3 2 1 1 1 SPORTS FOOTWEAR FOR MEN 0.23515 PRODUCT 3 2 1 1 2 SHOES FOR MEN 0.15246 SUBCLASS 3 2 1 2 0 FOOTWEAR FOR WOMEN 0.47835 PRODUCT 3 2 1 2 1 SPORTS FOOTWEAR FOR WOMEN 0.14788 PRODUCT 3 2 1 2 2 SHOES FOR WOMEN 0.14463 PRODUCT 3 2 1 2 3 SEASONAL FOOTWEAR FOR WOMEN 0.18584 SUBCLASS 3 2 1 3 0 FOOTWEAR FOR CHILDERN 0.33507 PRODUCT 3 2 1 3 1 SPORTS FOOTWEAR FOR CHILDREN 0.14380 PRODUCT 3 2 1 3 2 SHOES FOR CHILDREN 0.04193 PRODUCT 3 2 1 3 3 SCHOOL FOOTWEAR 0.14934 DIVISION 4 0 0 0 0 HOUSING AND BASIC SERVICES 14.82720 GROUP 4 1 0 0 0 EFFECTIVE RENTS 5.52872 CLASS 4 1 1 0 0 EFFECTIVE RENTS 5.52872 SUBCLASS 4 1 1 1 0 EFFECTIVE RENTS 5.52872 PRODUCT 4 1 1 1 1 RENTS 5.52872 GROUP 4 2 0 0 0 MAINTENANCE AND REPAIR OF THE DWELLING 1.71195 CLASS 4 2 1 0 0 MATERIALS FOR THE MAINTENANCE AND REPAIR OF THE DWELLING 0.82245 SUBCLASS 4 2 1 1 0 MATERIALS FOR THE MAINTENANCE AND REPAIR OF THE DWELLING 0.82245 PRODUCT 4 2 1 1 1 MATERIALS FOR THE REPAIR OF THE DWELLING 0.46731 PRODUCT 4 2 1 1 2 PAINTS AND VARNISHES 0.15008 PRODUCT 4 2 1 1 3 PLUMBING ITEMS 0.15152 PRODUCT 4 2 1 1 4 SEALANTS AND ADHESIVES 0.05354

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 CLASS 4 2 2 0 0 SERVICES FOR THE MAINTENANCE AND REPAIR OF THE DWELLING 0.88950 SUBCLASS 4 2 2 1 0 SERVICES FOR THE MAINTENANCE AND REPAIR OF THE DWELLING 0.88950 PRODUCT 4 2 2 1 1 SERVICES FOR THE MAINTENANCE AND REPAIR OF THE DWELLING 0.88950 GROUP 4 3 0 0 0 WATER SUPPLY AND MISCELLANEOUS SERVICES RELATING TO THE DWELLING 3.19834 CLASS 4 3 1 0 0 WATER SUPPLY 1.65637 SUBCLASS 4 3 1 1 0 WATER AND SEWAGE SUPPLY 1.65637 PRODUCT 4 3 1 1 1 DRINKING WATER 1.65637 CLASS 4 3 2 0 0 GARBAGE COLLECTION SERVICE 0.09053 SUBCLASS 4 3 2 1 0 GARBAGE COLLECTION SERVICE 0.09053 PRODUCT 4 3 2 1 1 GARBAGE COLLECTION SERVICE 0.09053 CLASS 4 3 3 0 0 OTHER HOUSING RELATED SERVICES 1.45144 SUBCLASS 4 3 3 1 0 OTHER HOUSING RELATED SERVICES 0.08189 PRODUCT 4 3 3 1 1 HOME SECURITY ALARMS 0.08189 SUBCLASS 4 3 3 2 0 CO-OWNERSHIP EXPENSES 1.36955 PRODUCT 4 3 3 2 1 CO-OWNERSHIP EXPENSES 1.36955 GROUP 4 4 0 0 0 ELECTRICITY, GAS, AND OTHER FUELS 4.38819 CLASS 4 4 1 0 0 ELECTRICITY 2.27238 SUBCLASS 4 4 1 1 0 ELECTRICITY 2.27238 PRODUCT 4 4 1 1 1 ELECTRICITY 2.27238 CLASS 4 4 2 0 0 GAS 1.61066 SUBCLASS 4 4 2 1 0 NETWORK GAS 0.46326 PRODUCT 4 4 2 1 1 NETWORK GAS 0.46326 SUBCLASS 4 4 2 2 0 LIQUEFIED GAS 1.14740 PRODUCT 4 4 2 2 1 LIQUEFIED GAS 1.14740 CLASS 4 4 3 0 0 OTHER HOUSEHOLD FUELS 0.50515 SUBCLASS 4 4 3 1 0 OTHER HOUSEHOLD FUELS 0.50515 PRODUCT 4 4 3 1 1 CHARCOAL 0.04009 PRODUCT 4 4 3 1 2 KEROSENE 0.11292 PRODUCT 4 4 3 1 3 FIREWOOD 0.35214 DIVISION 5 0 0 0 0 HOUSEHOLD EQUIPMENT AND MAINTENANCE 6.52285 GROUP 5 1 0 0 0 FURNITURE AND ACCESSORIES FOR THE HOUSEHOLD 1.00617 CLASS 5 1 1 0 0 FURNITURE AND ARTICLES FOR THE HOUSEHOLD 0.98359 SUBCLASS 5 1 1 1 0 HOUSEHOLD FURNITURE 0.81282 PRODUCT 5 1 1 1 1 BEDS 0.24409 PRODUCT 5 1 1 1 2 MATRESSES 0.04889 PRODUCT 5 1 1 1 3 DINING ROOM FURNITURE 0.12316 PRODUCT 5 1 1 1 4 KITCHEN FURNITURE 0.08476 PRODUCT 5 1 1 1 5 LIVING ROOM FURNITURE 0.31192 SUBCLASS 5 1 1 2 0 ORNAMENTAL ARTICLES FOR THE HOUSEHOLD 0.17077 PRODUCT 5 1 1 2 1 RUGS AND OTHER FLOOR COVERINGS 0.05674 PRODUCT 5 1 1 2 2 ORNAMENTAL ARTICLES 0.11403 CLASS 5 1 2 0 0 FURNITURE REPAIR SERVICES 0.02258 SUBCLASS 5 1 2 1 0 FURNITURE REPAIR SERVICES 0.02258 PRODUCT 5 1 2 1 1 FURNITURE REPAIR SERVICES 0.02258 GROUP 5 2 0 0 0 HOUSEHOLD TEXTILES 0.26025 CLASS 5 2 1 0 0 HOUSEHOLD TEXTILES 0.26025 SUBCLASS 5 2 1 1 0 HOUSEHOLD TEXTILES 0.26025 PRODUCT 5 2 1 1 1 BED LINEN 0.15219 PRODUCT 5 2 1 1 2 BATHROOM AND KITCHEN LINEN 0.06102 PRODUCT 5 2 1 1 3 LIVING AND DINING ROOM LINEN 0.04704 GROUP 5 3 0 0 0 HOUSEHOLD APPLIANCES 0.86579 CLASS 5 3 1 0 0 MAJOR HOUSEHOLD APPLIANCES, ELECTRIC AND NON-ELECTRIC 0.61030 SUBCLASS 5 3 1 1 0 HOUSEHOLD APPLIANCES 0.61030 PRODUCT 5 3 1 1 1 WATER HEATERS 0.03793 PRODUCT 5 3 1 1 2 STOVES 0.07588 PRODUCT 5 3 1 1 3 HOUSEHOLD HEATING APPLIANCES 0.07897

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 PRODUCT 5 3 1 1 4 ELECTRIC OVENS AND MICROWAVE OVENS 0.02647 PRODUCT 5 3 1 1 5 WASHING MACHINES 0.19793 PRODUCT 5 3 1 1 6 REFRIGERATORS 0.19312 CLASS 5 3 2 0 0 SMALL HOUSEHOLD APPLIANCES 0.21586 SUBCLASS 5 3 2 1 0 ELECTRICAL APPLIANCES 0.21586 PRODUCT 5 3 2 1 1 SMALL KITCHEN APPLIANCES 0.18237 PRODUCT 5 3 2 1 2 IRONS 0.03349 CLASS 5 3 3 0 0 REPAIR OF HOUSEHOLD APPLIANCES 0.03963 SUBCLASS 5 3 3 1 0 REPAIR SERVICES FOR HOUSEHOLD APPLIANCES 0.03963 PRODUCT 5 3 3 1 1 REPAIR SERVICES FOR HOUSEHOLD APPLIANCES 0.03963 GROUP 5 4 0 0 0 GLASSWARE, TABLEWARE, AND HOUSEHOLD UTENSILS 0.28175 CLASS 5 4 1 0 0 GLASSWARE, TABLEWARE, AND HOUSEHOLD UTENSILS 0.28175 SUBCLASS 5 4 1 1 0 HOUSEHOLD UTENSILS AND ARTICLES 0.28175 PRODUCT 5 4 1 1 1 TABLEWARE 0.13225 PRODUCT 5 4 1 1 2 KITCHEN UTENSILS 0.14950 GROUP 5 5 0 0 0 TOOLS AND EQUIPMENT FOR THE HOME AND GARDEN 0.31476 CLASS 5 5 1 0 0 MISCELLANEOUS TOOLS AND ACCESSORIES 0.31476 SUBCLASS 5 5 1 1 0 TOOLS 0.10642 PRODUCT 5 5 1 1 1 ELECTRIC TOOLS AND ACCESSORIES 0.04308 PRODUCT 5 5 1 1 2 HAND TOOLS AND ACCESSORIES 0.06334 SUBCLASS 5 5 1 2 0 HOUSEHOLD ACCESSORIES 0.20834 PRODUCT 5 5 1 2 1 LIGHTING ACCESSORIES 0.05921 PRODUCT 5 5 1 2 2 LOCKS AND RELATED ARTICLES 0.05605 PRODUCT 5 5 1 2 3 ELECTRIC ACCESSORIES 0.05831 PRODUCT 5 5 1 2 4 BATTERIES 0.03477 GROUP 5 6 0 0 0 GOODS AND SERVICES FOR ROUTINE HOUSEHOLD MAINTENANCE 3.79413 CLASS 5 6 1 0 0 NON-DURABLE HOUSEHOLD GOODS 1.14683 SUBCLASS 5 6 1 1 0 PRODUCTS FOR HOUSEHOLD CLEANING AND MAINTENANCE 0.85040 PRODUCT 5 6 1 1 1 AIR FRESHENERS AND DISINFECTANTS 0.08667 PRODUCT 5 6 1 1 2 LAUNDRY DETERGENT AND SOFTENERS 0.46756 PRODUCT 5 6 1 1 3 DISHWASHING LIQUID AND POWDER 0.07569 PRODUCT 5 6 1 1 4 HOUSEHOLD CLEANERS 0.18733 PRODUCT 5 6 1 1 5 INSECTICIDES AND SIMILAR PRODUCTS 0.03315 SUBCLASS 5 6 1 2 0 ARTICLES FOR HOUSEHOLD CLEANING 0.29643 PRODUCT 5 6 1 2 1 ARTICLES FOR CLEANING 0.10211 PRODUCT 5 6 1 2 2 TABLE NAPKINS AND PAPER TOWELS 0.19432 CLASS 5 6 2 0 0 DOMESTIC SERVICES FOR THE HOUSEHOLD 2.64730 SUBCLASS 5 6 2 1 0 DOMESTIC SERVICES 2.64730 PRODUCT 5 6 2 1 1 DOMESTIC SERVICE 2.64730 DIVISION 6 0 0 0 0 HEALTH 7.76778 GROUP 6 1 0 0 0 MEDICAL PRODUCTS, APPLIANCES, AND EQUIPMENT 2.89864 CLASS 6 1 1 0 0 PHARMACEUTICAL PRODUCTS 2.42319 SUBCLASS 6 1 1 1 0 MEDICATIONS 2.42319 PRODUCT 6 1 1 1 1 ANTI-INFECTIVE, ANTIVIRAL, AND ANTIFUNGAL MEDICATIONS 0.10445 PRODUCT 6 1 1 1 2 CARDIOVASCULAR MEDICATIONS 0.20425 PRODUCT 6 1 1 1 3 HORMONES AND GENITO-URINARY MEDICATIONS 0.30228

PRODUCT 6 1 1 1 4 NSAIDS, ANTI-MIGRAINE DRUGS, AND MEDICATIONS FOR THE OSTEO-MUSCULAR SYSTEM 0.13352

PRODUCT 6 1 1 1 5 MEDICATIONS FOR THE RESPIRATORY SYSTEM 0.27948 PRODUCT 6 1 1 1 6 DERMATOLOGICAL MEDICATIONS, DISNFECTANTS, AND ANTISEPTICS 0.17123 PRODUCT 6 1 1 1 7 MEDICATIONS FOR THE CENTRAL NERVOUS SYSTEM 0.37725 PRODUCT 6 1 1 1 8 MEDICATIONS FOR THE DIGESTIVE TRACT AND METABOLISM 0.60521 PRODUCT 6 1 1 1 9 OPHTHALMOLOGICAL PREPARATIONS 0.08479 PRODUCT 6 1 1 1 10 CANCER MEDICATIONS, IMMUNOMODIFIERS, MEDICATIONS USED IN PALLIATIVE CARE 0.07528

PRODUCT 6 1 1 1 11 HOMEOPATHIC MEDICATIONS AND DIETARY SUPPLEMENTS 0.08545

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 CLASS 6 1 2 0 0 OTHER MEDICAL PRODUCTS 0.07603 SUBCLASS 6 1 2 1 0 OTHER MEDICAL PRODUCTS 0.07603 PRODUCT 6 1 2 1 1 PLASTERS, DRESSINGS, AND BANDAGES 0.06780 PRODUCT 6 1 2 1 2 CONDOMS 0.00823 CLASS 6 1 3 0 0 THERAPEUTIC APPLIANCES AND EQUIPMENT 0.39942 SUBCLASS 6 1 3 1 0 THERAPEUTIC APPLIANCES AND EQUIPMENT 0.39942 PRODUCT 6 1 3 1 1 CORRECTIVE LENSES 0.34303 PRODUCT 6 1 3 1 2 DEVICES FOR MEASURING HEALTH 0.05639 GROUP 6 2 0 0 0 OUTPATIENT SERVICES 3.89758 CLASS 6 2 1 0 0 MEDICAL SERVICES 1.69192 SUBCLASS 6 2 1 1 0 MEDICAL SERVICES 1.69192 PRODUCT 6 2 1 1 1 MEDICAL APPOINTMENTS 1.13844 PRODUCT 6 2 1 1 2 PROCEDURES AND SURGERIES FOR OUTPATIENTS 0.55348 CLASS 6 2 2 0 0 DENTAL SERVICES 1.26413 SUBCLASS 6 2 2 1 0 DENTAL SERVICES 1.26413 PRODUCT 6 2 2 1 1 DENTAL APPOINTMENTS AND TREATMENT 1.26413 CLASS 6 2 3 0 0 PARAMEDICAL SERVICES 0.94153 SUBCLASS 6 2 3 1 0 RADIOLOGY SERVICES AND LABORATORY SERVICES FOR MEDICAL ANALYSIS AND DIAGNOSIS 0.59966 PRODUCT 6 2 3 1 1 IMAGING AND RADIOLOGY 0.33872 PRODUCT 6 2 3 1 2 CLINICAL LABORATORY TESTS 0.26094 SUBCLASS 6 2 3 2 0 SERVICES OF OTHER HEALTH PROFESSIONALS 0.34187 PRODUCT 6 2 3 2 1 SERVICES OF OTHER HEALTH PROFESSIONALS 0.34187 GROUP 6 3 0 0 0 HOSPITAL SERVICES 0.97156 CLASS 6 3 1 0 0 HOSPITAL SERVICES 0.97156 SUBCLASS 6 3 1 1 0 HOSPITALIZATION SERVICES 0.97156 PRODUCT 6 3 1 1 1 HOSPITALIZATION SERVICES 0.97156 DIVISION 7 0 0 0 0 TRANSPORTATION 13.12148 GROUP 7 1 0 0 0 PURCHASE OF VEHICLES 3.25706 CLASS 7 1 1 0 0 MOTOR VEHICLES 3.12888 SUBCLASS 7 1 1 1 0 NEW AUTOMOBILES 2.85541 PRODUCT 7 1 1 1 1 NEW AUTOMOBILES 2.85541 SUBCLASS 7 1 1 2 0 PREVIOUSLY USED AUTOMOBILES 0.27347 PRODUCT 7 1 1 2 1 PREVIOUSLY USED AUTOMOBILES 0.27347 CLASS 7 1 2 0 0 MOTORCYCLES 0.05903 SUBCLASS 7 1 2 1 0 MOTORCYCLES 0.05903 PRODUCT 7 1 2 1 1 MOTORCYCLES 0.05903 CLASS 7 1 3 0 0 BICYCLES 0.06915 SUBCLASS 7 1 3 1 0 BICYCLES 0.06915 PRODUCT 7 1 3 1 1 BICYCLES 0.06915 GROUP 7 2 0 0 0 OPERATION OF PERSONAL TRANSPORT EQUIPMENT 5.54238 CLASS 7 2 1 0 0 SPARE PARTS AND ACCESSORIES FOR PERSONAL TRANSPORT EQUIPMENT 0.39799 SUBCLASS 7 2 1 1 0 SPARE PARTS AND ACCESSORIES FOR AUTOMOBILES 0.39799 PRODUCT 7 2 1 1 1 SPARE PARTS FOR THE ELECTRICAL OPERATION OF AUTOMOBILES 0.07448 PRODUCT 7 2 1 1 2 TIRES AND RIMS 0.12297 PRODUCT 7 2 1 1 3 SPARE PARTS AND ACCESSORIES FOR THE MECHANICAL OPERATION OF AUTOMOBILES 0.20054 CLASS 7 2 2 0 0 FUELS AND LUBRICANTS FOR PERSONAL TRANSPORT EQUIPMENT 3.15228 SUBCLASS 7 2 2 1 0 AUTOMOTIVE FUELS 3.11474 PRODUCT 7 2 2 1 1 GASOLINE 2.73049 PRODUCT 7 2 2 1 2 DIESEL FUEL 0.38425 SUBCLASS 7 2 2 2 0 LUBRICANTS AND OILS FOR AUTOMOBILES 0.03754 PRODUCT 7 2 2 2 1 LUBRICANTS AND OILS FOR AUTOMOBILES 0.03754 CLASS 7 2 3 0 0 MAINTENANCE AND REPAIR OF PERSONAL TRANSPORT EQUIPMENT 0.89246 SUBCLASS 7 2 3 1 0 MAINTENANCE AND REPAIR SERVICES OF AUTOMOBILES 0.89246 PRODUCT 7 2 3 1 1 MAINTENANCE AND REPAIR SERVICES OF AUTOMOBILES 0.85480 PRODUCT 7 2 3 1 2 CAR WASH SERVICE 0.03766 CLASS 7 2 4 0 0 OTHER SERVICES RELATED TO PERSONAL TRANSPORT VEHICLES 1.09965

100

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 SUBCLASS 7 2 4 1 0 PARKING SERVICE 0.27610 PRODUCT 7 2 4 1 1 PARKING SERVICE 0.27610 SUBCLASS 7 2 4 2 0 OTHER SERVICES RELATED TO THE CIRCULATION OF VEHICLES 0.82355 PRODUCT 7 2 4 2 1 TOLL SERVICES 0.72502 PRODUCT 7 2 4 2 2 DRIVER'S LICENSES 0.02589 PRODUCT 7 2 4 2 3 ROADWORTHINESS TESTS 0.07264 GROUP 7 3 0 0 0 TRANSPORTATION SERVICES 4.32204 CLASS 7 3 1 0 0 PASSENGER TRANSPORT BY URBAN ROADS AND MOTORWAYS 2.30383 SUBCLASS 7 3 1 1 0 PASSENGER TRANSPORT BY URBAN ROADS 1.81018 PRODUCT 7 3 1 1 1 SHARED-TAXI TRANSPORTATION SERVICES 0.66401 PRODUCT 7 3 1 1 2 TAXI TRANSPORTATION SERVICES 0.33569 PRODUCT 7 3 1 1 3 SCHOOL BUS TRANSPORTATION SERVICES 0.20798 PRODUCT 7 3 1 1 4 URBAN BUS TRANSPORTATION SERVICES 0.57740 PRODUCT 7 3 1 1 5 SHUTTLE SERVICES 0.02510 SUBCLASS 7 3 1 2 0 PASSENGER TRANSPORT BY ROAD 0.49365 PRODUCT 7 3 1 2 1 INTERURBAN BUS TRANSPORTATION SERVICES 0.49365 CLASS 7 3 2 0 0 AIR PASSENGER TRANSPORTATION SERVICES 0.75389 SUBCLASS 7 3 2 1 0 AIR PASSENGER TRANSPORTATION SERVICES 0.75389 PRODUCT 7 3 2 1 1 AIR TRANSPORTATION SERVICES 0.75389 CLASS 7 3 3 0 0 COMBINED PASSENGER TRANSPORTATION SERVICES 1.26432 SUBCLASS 7 3 3 1 0 COMBINED PASSENGER TRANSPORTATION SERVICES 1.26432 PRODUCT 7 3 3 1 1 MULTIMODE TRANSPORTATION SERVICES 1.26432 DIVISION 8 0 0 0 0 COMMUNICATIONS 5.45488 GROUP 8 1 0 0 0 TELEPHONE DEVICES 0.61378 CLASS 8 1 1 0 0 TELEPHONE DEVICES 0.61378 SUBCLASS 8 1 1 1 0 TELEPHONE DEVICES 0.61378 PRODUCT 8 1 1 1 1 MOBILE TELEPHONE DEVICES 0.61378 GROUP 8 2 0 0 0 TELECOMMUNICATIONS SERVICES 4.84110 CLASS 8 2 1 0 0 TELECOMMUNICATIONS SERVICES 4.84110 SUBCLASS 8 2 1 1 0 TELECOMMUNICATIONS SERVICES 4.84110 PRODUCT 8 2 1 1 1 INTERNET CONNECTION SERVICES 0.29033 PRODUCT 8 2 1 1 2 MOBILE BROADBAND SERVICES 0.01605 PRODUCT 8 2 1 1 3 BUNDLED TELECOMMUNICATION SERVICES 2.09814 PRODUCT 8 2 1 1 4 MOBILE TELEPHONE SERVICES 2.34556 PRODUCT 8 2 1 1 5 FIXED-LINE TELEPHONE SERVICES 0.09102 DIVISION 9 0 0 0 0 RECREATION AND CULTURE 6.58912 GROUP 9 1 0 0 0 AUDIO-VISUAL, PHOTOGRAPHIC, AND INFORMATION-PROCESSING EQUIPMENT 1.06133 EQUIPMENT FOR THE RECEPTION, RECORDING, AND REPRODUCTION OF SOUNDS AND 0.48354 CLASS 9 1 1 0 0 PICTURES SUBCLASS 9 1 1 1 0 TELEVISION SETS 0.40468 PRODUCT 9 1 1 1 1 TELEVISION SETS 0.40468 SUBCLASS 9 1 1 2 0 AUDIO EQUIPMENT 0.07886 PRODUCT 9 1 1 2 1 SOUND EQUIPMENT 0.04775 PRODUCT 9 1 1 2 2 PORTABLE AUDIO AND VIDEO PLAYERS 0.03111 CLASS 9 1 2 0 0 PHOTOGRAPHIC EQUIPMENT 0.06172 SUBCLASS 9 1 2 1 0 CAMERAS 0.06172 PRODUCT 9 1 2 1 1 PHOTOGRAPHIC CAMERAS 0.06172 CLASS 9 1 3 0 0 COMPUTER PROCESSING EQUIPMENT 0.46834 SUBCLASS 9 1 3 1 0 COMPUTERS AND PRINTERS 0.46834 PRODUCT 9 1 3 1 1 COMPUTERS 0.41602 PRODUCT 9 1 3 1 2 PRINTERS 0.05232 CLASS 9 1 4 0 0 RECORDING MEDIA 0.04773 SUBCLASS 9 1 4 1 0 RECORDING OF SOUNDS AND IMAGES 0.04773 PRODUCT 9 1 4 1 1 DIGITAL STORAGE DEVICES 0.04773 GROUP 9 2 0 0 0 OTHER EQUIPMENT AND ITEMS FOR RECREATION, FLOWERS, GARDENING, AND PETS 1.87182 CLASS 9 2 1 0 0 VIDEO GAME CONSOLES AND TOYS 0.45272

101

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 SUBCLASS 9 2 1 1 0 VIDEO GAME CONSOLES AND TOYS 0.45272 PRODUCT 9 2 1 1 1 TOYS 0.39909 PRODUCT 9 2 1 1 2 VIDEO GAME CONSOLES 0.05363 CLASS 9 2 2 0 0 EQUIPMENT FOR SPORTS, CAMPING, AND RECREATION 0.29935 SUBCLASS 9 2 2 1 0 EQUIPMENT FOR SPORTS, CAMPING, AND RECREATION 0.29935 PRODUCT 9 2 2 1 1 SPORTS EQUIPMENT 0.18023 PRODUCT 9 2 2 1 2 CAMPING EQUIPMENT 0.04496 PRODUCT 9 2 2 1 3 MUSICAL INSTRUMENTS 0.07416 CLASS 9 2 3 0 0 GARDENING AND FLOWERS 0.11965 SUBCLASS 9 2 3 1 0 GARDENING AND FLOWERS 0.11965 PRODUCT 9 2 3 1 1 FLOWERS 0.08826 PRODUCT 9 2 3 1 2 PLANTS 0.03139 CLASS 9 2 4 0 0 PETS AND RELATED PRODUCTS 0.75279 SUBCLASS 9 2 4 1 0 PET FOOD AND ACCESSORIES 0.75279 PRODUCT 9 2 4 1 1 PET FOOD 0.68823 PRODUCT 9 2 4 1 2 PET ACCESSORIES 0.06456 CLASS 9 2 5 0 0 VETERINARY SERVICES 0.24731 SUBCLASS 9 2 5 1 0 VETERINARY SERVICES 0.24731 PRODUCT 9 2 5 1 1 VETERINARY SERVICES 0.24731 GROUP 9 3 0 0 0 RECREATIONAL AND CULTURAL SERVICES 2.07283 CLASS 9 3 1 0 0 RECREATIONAL AND SPORTING SERVICES 1.16052 SUBCLASS 9 3 1 1 0 SERVICES PROVIDED BY SPORTS CLUBS AND RECREATIONAL CENTERS 0.84884 PRODUCT 9 3 1 1 1 SERVICES PROVIDED BY RECREATIONAL CENTERS 0.07416 PRODUCT 9 3 1 1 2 ENTRANCE FEES FOR SPORTING EVENTS 0.02565 PRODUCT 9 3 1 1 3 ENTRANCE FEES FOR NIGHTCLUBS 0.05024 PRODUCT 9 3 1 1 4 BIRTHDAY PARTY SERVICES 0.15119 PRODUCT 9 3 1 1 5 GYMNASIUMS 0.54760 SUBCLASS 9 3 1 2 0 SPORTS AND RECREATION CLASSES 0.31168 PRODUCT 9 3 1 2 1 SPORTS CLASSES 0.20658 PRODUCT 9 3 1 2 2 RECREATION CLASSES 0.10510 CLASS 9 3 2 0 0 CULTURAL SERVICES 0.88753 SUBCLASS 9 3 2 1 0 SERVICES PROVIDED BY CULTURAL ESTABLISHMENTS 0.49267 PRODUCT 9 3 2 1 1 CINEMA TICKETS 0.23441 PRODUCT 9 3 2 1 2 ENTRANCE FEES FOR CULTURAL EVENTS 0.25826 SUBCLASS 9 3 2 2 0 PHOTOGRAPHY SERVICES 0.02779 PRODUCT 9 3 2 2 1 PHOTOGRAPHIC PROCESSING SERVICES 0.02779 SUBCLASS 9 3 2 3 0 TELEVISION AND ONLINE SUBSCRIPTION SERVICES 0.36707 PRODUCT 9 3 2 3 1 PAID RESIDENTIAL TELEVISION SERVICES 0.33837 PRODUCT 9 3 2 3 2 ONLINE SUBSCRIPTION SERVICES 0.02870 CLASS 9 3 3 0 0 GAMES OF CHANCE 0.02478 SUBCLASS 9 3 3 1 0 GAMES OF CHANCE 0.02478 PRODUCT 9 3 3 1 1 GAMES OF CHANCE 0.02478 GROUP 9 4 0 0 0 NEWSPAPERS, BOOKS, AND OFFICE SUPPLIES 0.81729 CLASS 9 4 1 0 0 BOOKS, DICTIONARIES, ENCYCLOPEDIAS, AND SIMILAR ITEMS 0.40005 SUBCLASS 9 4 1 1 0 TEXTBOOKS 0.17324 PRODUCT 9 4 1 1 1 TEXTBOOKS 0.17324 SUBCLASS 9 4 1 2 0 BOOKS 0.22681 PRODUCT 9 4 1 2 1 BOOKS 0.22681 CLASS 9 4 2 0 0 NEWSPAPERS 0.07140 SUBCLASS 9 4 2 1 0 NEWSPAPERS 0.07140 PRODUCT 9 4 2 1 1 NEWSPAPERS 0.07140 CLASS 9 4 3 0 0 SCHOOL SUPPLIES AND STATIONERY 0.34584 SUBCLASS 9 4 3 1 0 SCHOOL SUPPLIES 0.31019 PRODUCT 9 4 3 1 1 NOTEBOOKS 0.21817 PRODUCT 9 4 3 1 2 ART SUPPLIES 0.09202 SUBCLASS 9 4 3 2 0 STATIONERY 0.03565

102

WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 PRODUCT 9 4 3 2 1 STATIONERY 0.03565 GROUP 9 5 0 0 0 PACKAGE TOURS 0.76585 CLASS 9 5 1 0 0 PACKAGE TOURS 0.76585 SUBCLASS 9 5 1 1 0 ALL INCLUSIVE TRAVEL SERVICES 0.76585 PRODUCT 9 5 1 1 1 PACKAGE TOURS 0.76585 DIVISION 10 0 0 0 0 EDUCATION 6.59568 GROUP 10 1 0 0 0 PRE-PRIMARY AND PRIMARY EDUCATION 1.72331 CLASS 10 1 1 0 0 PRE-PRIMARY AND PRIMARY EDUCATION 1.72331 SUBCLASS 10 1 1 1 0 PRE-PRIMARY AND PRIMARY EDUCATIONAL SERVICES 1.72331 PRODUCT 10 1 1 1 1 PRE-PRIMARY EDUCATION SERVICES 0.29383 PRODUCT 10 1 1 1 2 KINDERGARTEN EDUCATION SERVICES 0.21585 PRODUCT 10 1 1 1 3 FIRST PHASE OF PRIMARY EDUCATION (FIRST TO FOURTH GRADE) 0.64393 PRODUCT 10 1 1 1 4 SECOND PHASE OF PRIMARY EDUCATION (FIFTH TO EIGHTH GRADE) 0.56970 GROUP 10 2 0 0 0 SECONDARY EDUCATION 0.64279 CLASS 10 2 1 0 0 SECONDARY EDUCATION 0.64279 SUBCLASS 10 2 1 1 0 SECONDARY EDUCATION SERVICES 0.64279 PRODUCT 10 2 1 1 1 SECONDARY EDUCATION SERVICES 0.64279 GROUP 10 3 0 0 0 POST-SECONDARY, NON-TERTIARY EDUCATION 0.16925 CLASS 10 3 1 0 0 POST-SECONDARY, NON-TERTIARY EDUCATION 0.16925 SUBCLASS 10 3 1 1 0 UNIVERSTIY PREPARATION SERVICES 0.16925 PRODUCT 10 3 1 1 1 UNIVERSTIY PREPARATION SERVICES 0.16925 GROUP 10 4 0 0 0 TERTIARY EDUCATION 3.52689 CLASS 10 4 1 0 0 TERTIARY EDUCATION 3.52689 SUBCLASS 10 4 1 1 0 TERTIARY EDUCATION SERVICES 3.52689 PRODUCT 10 4 1 1 1 TRAINING IN TECHNICAL CENTERS 0.14346 PRODUCT 10 4 1 1 2 PROFESSIONAL INSTITUTES 0.61738 PRODUCT 10 4 1 1 3 UNIVERSITY EDUCATION 2.49843 PRODUCT 10 4 1 1 4 POSTGRADUATE EDUCATION 0.26762 GROUP 10 5 0 0 0 EDUCATION NOT DEFINABLE BY LEVEL AND OTHER EDUCATIONAL SERVICES 0.53344 CLASS 10 5 1 0 0 EDUCATION NOT DEFINABLE BY LEVEL 0.53344 SUBCLASS 10 5 1 1 0 EDUCATIONAL SERVICES NOT DEFINABLE BY LEVEL 0.53344 PRODUCT 10 5 1 1 1 TRAINING COURSES 0.53344 DIVISION 11 0 0 0 0 RESTAURANTS AND HOTELS 6.38347 GROUP 11 1 0 0 0 RESTAURANT AND HOTEL SERVICES 5.86871 CLASS 11 1 1 0 0 RESTAURANTS, CAFES, AND SIMILAR ESTABLISHMENTS 5.86871 SUBCLASS 11 1 1 1 0 FOOD AND BEVERAGES CONSUMED OUTSIDE THE HOME 4.26808 PRODUCT 11 1 1 1 1 FOOD CONSUMED OUTSIDE THE HOME 3.10518 PRODUCT 11 1 1 1 2 SANDWICHES AND HOT DOGS CONSUMED OUTSIDE THE HOME 0.57601 PRODUCT 11 1 1 1 3 ALCOHOLIC BEVERAGES CONSUMED OUTSIDE THE HOME 0.16398 PRODUCT 11 1 1 1 4 NON-ALCOHOLIC BEVERAGES CONSUMED OUTSIDE THE HOME 0.33339 PRODUCT 11 1 1 1 5 ICE CREAM AND DESSERTS CONSUMED OUTSIDE THE HOME 0.08952 SUBCLASS 11 1 1 2 0 TAKE-OUT FOOD 1.60063 PRODUCT 11 1 1 2 1 TAKE-OUT FOOD 1.60063 GROUP 11 2 0 0 0 ACCOMMODATION SERVICES 0.51476 CLASS 11 2 1 0 0 ACCOMMODATION SERVICES 0.51476 SUBCLASS 11 2 1 1 0 ACCOMMODATION SERVICES 0.51476 PRODUCT 11 2 1 1 1 ACCOMMODATION SERVICES FOR TOURISTS 0.51476 DIVISION 12 0 0 0 0 MISCELLANEOUS GOODS AND SERVICES 5.15260 GROUP 12 1 0 0 0 PERSONAL CARE 2.78308 CLASS 12 1 1 0 0 HAIRDRESSING SALONS AND PERSONAL CARE ESTABLISHMENTS 0.39909 SUBCLASS 12 1 1 1 0 HAIRDRESSING AND PERSONAL CARE SERVICES 0.39909 PRODUCT 12 1 1 1 1 HAIRDRESSING 0.28677 PRODUCT 12 1 1 1 2 SERVICES PROVIDED IN BEAUTY SALONS 0.11232 CLASS 12 1 2 0 0 PRODUCTS FOR PERSONAL CARE AND HYGIENE 2.38399 SUBCLASS 12 1 2 1 0 PRODUCTS FOR PERSONAL CARE 0.52981 PRODUCT 12 1 2 1 1 ELECTRIC RAZORS AND HAIR REMOVAL MACHINES 0.03000

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WEIGHTING Structure D G C SC P DESCRIPTION 2018=100 2018=100 PRODUCT 12 1 2 1 2 DISPOSIBLE RAZORS 0.05440 PRODUCT 12 1 2 1 3 MISCELLANEOUS ITEMS FOR PERSONAL CARE 0.03717 PRODUCT 12 1 2 1 4 SUNSCREENS 0.03724 PRODUCT 12 1 2 1 5 COLOGNES AND PERFUMES 0.20367 PRODUCT 12 1 2 1 6 DEODORANTS AND ANTIPERSPIRANTS 0.16733 SUBCLASS 12 1 2 2 0 PERONAL HYGIENE PRODUCTS 1.40288 PRODUCT 12 1 2 2 1 ORAL HYGIENE PRODUCTS 0.17978 PRODUCT 12 1 2 2 2 TOILET PAPER 0.37335 PRODUCT 12 1 2 2 3 SOAP 0.11949 PRODUCT 12 1 2 2 4 DISPOSABLE DIAPERS 0.36613 PRODUCT 12 1 2 2 5 FEMNINE HYGIENE PROTECTION 0.08028 PRODUCT 12 1 2 2 6 SHAMPOO AND CONDITIONER 0.28385 SUBCLASS 12 1 2 3 0 BEAUTY PRODUCTS 0.45130 PRODUCT 12 1 2 3 1 SKIN CREAMS 0.17784 PRODUCT 12 1 2 3 2 MAKEUP 0.15331 PRODUCT 12 1 2 3 3 HAIR DYES AND HAIRSPRAY 0.12015 GROUP 12 2 0 0 0 OTHER PERSONAL ARTICLES 0.61879 CLASS 12 2 1 0 0 JEWELRY AND WATCHES 0.24136 SUBCLASS 12 2 1 1 0 JEWELRY AND WATCHES 0.24136 PRODUCT 12 2 1 1 1 JEWELRY 0.17174 PRODUCT 12 2 1 1 2 WATCHES 0.06962 CLASS 12 2 2 0 0 OTHER PERSONAL ARTICLES 0.37743 SUBCLASS 12 2 2 1 0 OTHER PERSONAL ARTICLES 0.37743 PRODUCT 12 2 2 1 1 ARTICLES FOR TRANSPORT OF PERSONAL EFFECTS 0.29735 PRODUCT 12 2 2 1 2 ARTICLES FOR TRANSPORT OF INFANTS 0.03873 PRODUCT 12 2 2 1 3 SUNGLASSES 0.04135 GROUP 12 3 0 0 0 INSURANCE 0.61603 CLASS 12 3 1 0 0 INSURANCE RELATED TO TRANSPORTATION AND FINANCIAL INSTRUMENTS 0.61603 SUBCLASS 12 3 1 1 0 INSURANCE RELATED TO TRANSPORTATION AND FINANCIAL INSTRUMENTS 0.61603 PRODUCT 12 3 1 1 1 INSURANCE 0.61603 GROUP 12 4 0 0 0 FINANCIAL SERVICES 0.23354 CLASS 12 4 1 0 0 OTHER FINANCIAL SERVICES 0.23354 SUBCLASS 12 4 1 1 0 EXPENDITURES FOR ADMINISTRATION OF FINANCIAL SERVICES 0.23354 PRODUCT 12 4 1 1 1 FINANCIAL EXPENDITURES 0.23354 GROUP 12 5 0 0 0 OTHER SERVICES 0.90116 CLASS 12 5 1 0 0 OTHER SERVICES 0.90116 SUBCLASS 12 5 1 1 0 OTHER SERVICES 0.90116 PRODUCT 12 5 1 1 1 ISSUANCE OF CERTIFICATES 0.04128 PRODUCT 12 5 1 1 2 PHOTOCOPY SERVICES 0.04202 PRODUCT 12 5 1 1 3 MEMBERSHIP IN PROFESSIONAL ORGANIZATIONS 0.09664 PRODUCT 12 5 1 1 4 NOTARY SERVICES 0.01836 PRODUCT 12 5 1 1 5 FUNERAL SERVICES 0.31463 PRODUCT 12 5 1 1 6 FEES FOR PARENT/GUARDIAN CENTERS 0.15544 PRODUCT 12 5 1 1 7 NURSING HOME CARE FOR THE ELDERLY 0.16485 PRODUCT 12 5 1 1 8 CHILD DAY CARE SERVICES 0.06794

Source: National Statistics Institute (INE)

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Appendix 6. Composition of analytical indices

Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products

1 1 1 1 1 RICE 0 0 1 0 1 0 1 0 1 1 1 2 1 FLOUR 0 0 1 0 1 0 1 0 1 1 1 2 2 CEREAL 0 0 1 0 1 0 1 0 1 1 1 3 1 BREAD 0 0 1 0 1 0 1 0 1 1 1 3 2 BISCUITS 0 0 1 0 1 0 1 0 1 1 1 3 3 PASTRIES 0 0 1 0 1 0 1 0 1 1 1 3 4 PREPARED SAVORY DOUGHS 0 0 1 0 1 0 1 0 1 1 1 3 5 SNACKS 0 0 1 0 1 0 1 0 1 1 1 4 1 PASTA 0 0 1 0 1 0 1 0 1 1 2 1 1 BOVINE MEAT 0 0 1 0 1 0 1 0 1 1 2 2 1 PORK 0 0 1 0 1 0 1 0 1 1 2 3 1 TURKEY POULTRY 0 0 1 0 1 0 1 0 1 1 2 3 2 CHICKEN POULTRY 0 0 1 0 1 0 1 0 1 1 2 4 1 CURED MEATS 0 0 1 0 1 0 1 0 1 1 2 4 2 BURGERS 0 0 1 0 1 0 1 0 1 1 3 1 1 FISH 0 0 1 0 1 0 1 0 1 1 3 2 1 SEAFOOD 0 0 1 0 1 0 1 0 1 1 3 3 1 CANNED FISH 0 0 1 0 1 0 1 0 1 1 3 3 2 CANNED SEAFOOD 0 0 1 0 1 0 1 0 1 1 4 1 1 POWDERED MILK 0 0 1 0 1 0 1 0 1 1 4 1 2 LIQUID MILK 0 0 1 0 1 0 1 0 1 1 4 1 3 PROCESSED MILK 0 0 1 0 1 0 1 0 1 1 4 2 1 YOGHURT 0 0 1 0 1 0 1 0 1 1 4 2 2 MILK-BASED DESSERTS 0 0 1 0 1 0 1 0 1 1 4 3 1 CHEESE 0 0 1 0 1 0 1 0 1 1 4 4 1 EGGS 0 0 1 0 1 0 1 0 1 1 5 1 1 BUTTER 0 0 1 0 1 0 1 0 1 1 5 1 2 MARGARINE 0 0 1 0 1 0 1 0 1 1 5 2 1 VEGETABLE OILS 0 0 1 0 1 0 1 0 1 1 6 1 1 APPLES 0 1 1 0 1 0 1 0 1 1 6 1 2 ORANGES 0 1 1 0 1 0 1 0 1 1 6 1 3 PEARS 0 1 1 0 1 0 1 0 1 1 6 1 4 BANANAS 0 1 1 0 1 0 1 0 1 1 6 1 5 SEASONAL FRUITS 0 1 1 0 1 0 1 0 1 1 6 2 1 NUTS AND DRIED FRUITS 0 0 1 0 1 0 1 0 1 1 6 2 2 CANNED FRUIT 0 0 1 0 1 0 1 0 1 1 7 1 1 CHARD AND SPINICH 0 1 1 0 1 0 1 0 1 1 7 1 2 ONIONS AND CHIVES 0 1 1 0 1 0 1 0 1 1 7 1 3 LETTUCE 0 1 1 0 1 0 1 0 1 1 7 1 4 LEMONS 0 1 1 0 1 0 1 0 1 1 7 1 5 AVOCADOS 0 1 1 0 1 0 1 0 BELL PEPPERS AND CHILI 1 1 7 1 6 0 1 1 0 1 0 1 0 PEPPERS 1 1 7 1 7 TOMATOES 0 1 1 0 1 0 1 0 1 1 7 1 8 CARROTS 0 1 1 0 1 0 1 0 1 1 7 1 9 PUMPKIN 0 1 1 0 1 0 1 0 1 1 7 1 10 ZUCCHINI 0 1 1 0 1 0 1 0 1 1 7 1 11 SEASONAL VEGETABLES 0 1 1 0 1 0 1 0 1 1 7 1 12 FROZEN VEGETABLES 0 0 1 0 1 0 1 0 1 1 7 1 13 CANNED VEGETABLES 0 0 1 0 1 0 1 0 1 1 7 1 14 PICKLES VEGETABLES 0 0 1 0 1 0 1 0 1 1 7 2 1 LEGUMES 0 0 1 0 1 0 1 0 1 1 7 3 1 POTATOES 0 1 1 0 1 0 1 0

105

Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products FROZEN AND DEHYDRATED 1 1 7 3 2 0 0 1 0 1 0 1 0 POTATOES FROZEN, CHIPPED 1 1 7 3 3 0 0 1 0 1 0 1 0 POTATOES 1 1 8 1 1 SUGAR 0 0 1 0 1 0 1 0 1 1 8 1 2 SWEETENER 0 0 1 0 1 0 1 0 1 1 8 2 1 JAMS 0 0 1 0 1 0 1 0 MANJAR AND OTHER SWEET 1 1 8 2 2 0 0 1 0 1 0 1 0 SPREADS 1 1 8 3 1 CANDY AND CHEWING GUM 0 0 1 0 1 0 1 0 1 1 8 3 2 CHOCOLATE 0 0 1 0 1 0 1 0 1 1 8 4 1 ICE CREAM 0 0 1 0 1 0 1 0 1 1 9 1 1 SALT 0 0 1 0 1 0 1 0 HEBRS, SPICES, AND 1 1 9 1 2 0 0 1 0 1 0 1 0 CONDIMENTS 1 1 9 2 1 SAUCES 0 0 1 0 1 0 1 0 1 1 9 2 2 SEASONINGS 0 0 1 0 1 0 1 0 1 1 9 3 1 SOUPS AND BROTHS 0 0 1 0 1 0 1 0 1 1 9 3 2 BABY FOOD 0 0 1 0 1 0 1 0 1 1 9 3 3 NON-DAIRY DESSERTS 0 0 1 0 1 0 1 0 1 2 1 1 1 COFFEE AND SUBSITUTES 0 0 1 0 1 0 1 0 1 2 1 2 1 TEA 0 0 1 0 1 0 1 0 FLAVORINGS FOR MILK 1 2 1 3 1 0 0 1 0 1 0 1 0 PRODUCTS 1 2 2 1 1 BOTTLED WATER 0 0 1 0 1 0 1 0 1 2 2 2 1 SOFT DRINKS 0 0 1 0 1 0 1 0 ISOTONIC AND ENERGY 1 2 2 2 2 0 0 1 0 1 0 1 0 DRINKS 1 2 2 3 1 LIQUID JUICES 0 0 1 0 1 0 1 0 1 2 2 3 2 JUICE POWDER 0 0 1 0 1 0 1 0 2 1 1 1 1 PISCO 1 0 0 0 1 0 1 0 2 1 1 1 2 RUM 1 0 0 0 1 0 1 0 2 1 1 1 3 WHISKY 1 0 0 0 1 0 1 0 2 1 1 1 4 VODKA 1 0 0 0 1 0 1 0 2 1 2 1 1 WINE 1 0 0 0 1 0 1 0 2 1 2 1 2 SPARKLING WINE 1 0 0 0 1 0 1 0 2 1 3 1 1 BEER 1 0 0 0 1 0 1 0 2 2 1 1 1 CIGARETTES 1 0 0 0 1 0 1 0 3 1 1 1 1 CLOTHING FABRICS 1 0 0 0 1 0 1 0 3 1 2 1 1 COATS FOR MEN 1 0 0 0 1 0 1 0 TROUSERS AND SHORTS FOR 3 1 2 1 2 1 0 0 0 1 0 1 0 MEN SHIRTS AND T-SHIRTS FOR 3 1 2 1 3 1 0 0 0 1 0 1 0 MEN UNDERWEAR AND 3 1 2 1 4 1 0 0 0 1 0 1 0 SLEEPWEAR FOR MEN 3 1 2 2 1 COATS FOR WOMEN 1 0 0 0 1 0 1 0 TROUSERS, SKIRTS, AND 3 1 2 2 2 1 0 0 0 1 0 1 0 DRESSES FOR WOMEN BLOUSES AND T-SHIRTS FOR 3 1 2 2 3 1 0 0 0 1 0 1 0 WOMEN SPORTSWEAR AND 3 1 2 2 4 1 0 0 0 1 0 1 0 SWIMWEAR FOR WOMEN UNDERWEAR AND 3 1 2 2 5 1 0 0 0 1 0 1 0 SLEEPWEAR FOR WOMEN 3 1 2 3 1 COATS FOR CHILDREN 1 0 0 0 1 0 1 0 TROUSERS, SKIRTS, AND 3 1 2 3 2 1 0 0 0 1 0 1 0 DRESSES FOR CHILDREN SHIRTS, BLOUSES, AND T- 3 1 2 3 3 1 0 0 0 1 0 1 0 SHIRTS FOR CHILDREN

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Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products SPORTSWEAR, SHORTS, AND 3 1 2 3 4 1 0 0 0 1 0 1 0 SWIMWEAR FOR CHILDREN UNDERWEAR AND 3 1 2 3 5 1 0 0 0 1 0 1 0 SLEEPWEAR FOR CHILDREN 3 1 2 3 6 CLOTHING FOR INFANTS 1 0 0 0 1 0 1 0 SCHOOL UNIFORMS AND 3 1 2 4 1 1 0 0 0 1 0 1 0 SPORTSWEAR ARTICLES FOR CLOTHING 3 1 3 1 1 1 0 0 0 1 0 1 0 REPAIR 3 1 3 1 2 CLOTHING ACCESSORIES 1 0 0 0 1 0 1 0 CLEANING AND REPAIR OF 3 1 4 1 1 1 0 0 1 0 0 0 1 CLOTHING SPORTS FOOTWEAR FOR 3 2 1 1 1 1 0 0 0 1 0 1 0 MEN 3 2 1 1 2 SHOES FOR MEN 1 0 0 0 1 0 1 0 SPORTS FOOTWEAR FOR 3 2 1 2 1 1 0 0 0 1 0 1 0 WOMEN 3 2 1 2 2 SHOES FOR WOMEN 1 0 0 0 1 0 1 0 SEASONAL FOOTWEAR FOR 3 2 1 2 3 1 0 0 0 1 0 1 0 WOMEN SPORTS FOOTWEAR FOR 3 2 1 3 1 1 0 0 0 1 0 1 0 CHILDREN 3 2 1 3 2 SHOES FOR CHILDREN 1 0 0 0 1 0 1 0 3 2 1 3 3 SCHOOL FOOTWEAR 1 0 0 0 1 0 1 0 4 1 1 1 1 RENTS 1 0 0 1 0 0 0 1 MATERIALS FOR THE REPAIR 4 2 1 1 1 1 0 0 0 1 0 1 0 OF THE DWELLING 4 2 1 1 2 PAINTS AND VARNISHES 1 0 0 0 1 0 1 0 4 2 1 1 3 PLUMBING ITEMS 1 0 0 0 1 0 1 0 4 2 1 1 4 SEALANTS AND ADHESIVES 1 0 0 0 1 0 1 0 SERVICES FOR THE 4 2 2 1 1 MAINTENANCE AND REPAIR 1 0 0 1 0 0 0 1 OF THE DWELLING 4 3 1 1 1 DRINKING WATER 1 0 0 1 0 0 0 1 GARBAGE COLLECTION 4 3 2 1 1 1 0 0 1 0 0 0 1 SERVICE 4 3 3 1 1 HOME SECURITY ALARMS 1 0 0 1 0 0 0 1 4 3 3 2 1 CO-OWNERSHIP EXPENSES 1 0 0 1 0 0 0 1 4 4 1 1 1 ELECTRICITY 0 0 0 1 0 1 1 0 4 4 2 1 1 NETWORK GAS 0 0 0 1 0 1 1 0 4 4 2 2 1 LIQUEFIED GAS 0 0 0 0 1 1 1 0 4 4 3 1 1 CHARCOAL 0 0 0 0 1 1 1 0 4 4 3 1 2 KEROSENE 0 0 0 0 1 1 1 0 4 4 3 1 3 FIREWOOD 0 0 0 0 1 1 1 0 5 1 1 1 1 BEDS 1 0 0 0 1 0 1 0 5 1 1 1 2 MATTRESSES 1 0 0 0 1 0 1 0 5 1 1 1 3 DINING ROOM SERVICES 1 0 0 0 1 0 1 0 5 1 1 1 4 KITCHEN FURNITURE 1 0 0 0 1 0 1 0 5 1 1 1 5 LIVING ROOM FURNITURE 1 0 0 0 1 0 1 0 RUGS AND OTHER FLOOR 5 1 1 2 1 1 0 0 0 1 0 1 0 COVERINGS 5 1 1 2 2 ORNAMENTAL ARTICLES 1 0 0 0 1 0 1 0 FURNITURE REPAIR 5 1 2 1 1 1 0 0 1 0 0 0 1 SERVICES 5 2 1 1 1 BED LINEN 1 0 0 0 1 0 1 0 BATHROOM AND KITCHEN 5 2 1 1 2 1 0 0 0 1 0 1 0 LINEN LIVING AND DINING ROOM 5 2 1 1 3 1 0 0 0 1 0 1 0 LINEN 5 3 1 1 1 WATER HEATERS 1 0 0 0 1 0 1 0

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Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products 5 3 1 1 2 STOVES 1 0 0 0 1 0 1 0 HOUSEHOLD HEATING 5 3 1 1 3 1 0 0 0 1 0 1 0 APPLIANCES ELECTRIC OVENS AND 5 3 1 1 4 1 0 0 0 1 0 1 0 MICROWAVE OVENS 5 3 1 1 5 WASHING MACHINES 1 0 0 0 1 0 1 0 5 3 1 1 6 REFRIGERATORS 1 0 0 0 1 0 1 0 5 3 2 1 1 SMALL KITCHEN APPLIANCES 1 0 0 0 1 0 1 0 5 3 2 1 2 IRONS 1 0 0 0 1 0 1 0 REPAIR SERVICES FOR 5 3 3 1 1 1 0 0 1 0 0 0 1 HOUSEHOLD APPLIANCES 5 4 1 1 1 TABLEWARE 1 0 0 0 1 0 1 0 5 4 1 1 2 KITCHEN UTENSILS 1 0 0 0 1 0 1 0 ELECTRIC TOOLS AND 5 5 1 1 1 1 0 0 0 1 0 1 0 ACCESSORIES HAND TOOLS AND 5 5 1 1 2 1 0 0 0 1 0 1 0 ACCESSORIES 5 5 1 2 1 LIGHTING ACCESSORIES 1 0 0 0 1 0 1 0 LOCKS AND RELATED 5 5 1 2 2 1 0 0 0 1 0 1 0 ARTICLES 5 5 1 2 3 ELECTRIC ACCESSORIES 1 0 0 0 1 0 1 0 5 5 1 2 4 BATTERIES 1 0 0 0 1 0 1 0 AIR FRESHENERS AND 5 6 1 1 1 1 0 0 0 1 0 1 0 DISINFECTANTS LAUNDRY DETERGENT AND 5 6 1 1 2 1 0 0 0 1 0 1 0 SOFTENERS DISHWASHING LIQUID AND 5 6 1 1 3 1 0 0 0 1 0 1 0 POWDER 5 6 1 1 4 HOUSEHOLD CLEANERS 1 0 0 0 1 0 1 0 INSECTICIDES AND SIMILAR 5 6 1 1 6 1 0 0 0 1 0 1 0 PRODUCTS 5 6 1 2 1 ARTICLES FOR CLEANING 1 0 0 0 1 0 1 0 TABLE NAPKINS AND PAPER 5 6 1 2 2 1 0 0 0 1 0 1 0 TOWELS 5 6 2 1 1 DOMESTIC SERVICE 1 0 0 1 0 0 0 1 ANTI-INFECTIVE, ANTIVIRAL, 6 1 1 1 1 AND ANTIFUNGAL 1 0 0 0 1 0 1 0 MEDICATIONS CARDIOVASCULAR 6 1 1 1 2 1 0 0 0 1 0 1 0 MEDICATIONS HORMONES AND GENITO- 6 1 1 1 3 1 0 0 0 1 0 1 0 URINARY MEDICATIONS NSAIDS, ANTI-MIGRAINE DRUGS, AND MEDICATIONS 6 1 1 1 4 1 0 0 0 1 0 1 0 FOR THE OSTEO-MUSCULAR SYSTEM MEDICATIONS FOR THE 6 1 1 1 5 1 0 0 0 1 0 1 0 RESPIRATORY SYSTEM DERMATOLOGICAL MEDICATIONS, 6 1 1 1 6 1 0 0 0 1 0 1 0 DISNFECTANTS, AND ANTISEPTICS MEDICATIONS FOR THE 6 1 1 1 7 1 0 0 0 1 0 1 0 CENTRAL NERVOUS SYSTEM MEDICATIONS FOR THE 6 1 1 1 8 DIGESTIVE TRACT AND 1 0 0 0 1 0 1 0 METABOLISM OPHTHALMOLOGICAL 6 1 1 1 9 1 0 0 0 1 0 1 0 PREPARATIONS

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Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products CANCER MEDICATIONS, IMMUNO-MODIFIERS, 6 1 1 1 10 1 0 0 0 1 0 1 0 MEDICATIONS USED IN PALLIATIVE CARE HOMEOPATHIC 6 1 1 1 11 MEDICATIONS AND DIETARY 1 0 0 0 1 0 1 0 SUPPLEMENTS PLASTERS, DRESSINGS, AND 6 1 2 1 1 1 0 0 0 1 0 1 0 BANDAGES 6 1 2 1 2 CONDOMS 1 0 0 0 1 0 1 0 6 1 3 1 1 CORRECTIVE LENSES 1 0 0 0 1 0 1 0 DEVICES FOR MEASURING 6 1 3 1 2 1 0 0 0 1 0 1 0 HEALTH 6 2 1 1 1 MEDICAL APPOINTMENTS 1 0 0 1 0 0 0 1 PROCEDURES AND 6 2 1 1 2 SURGERIES FOR 1 0 0 1 0 0 0 1 OUTPATIENTS DENTAL APPOINTMENTS 6 2 2 1 1 1 0 0 1 0 0 0 1 AND TREATMENT 6 2 3 1 1 IMAGING AND RADIOLOGY 1 0 0 1 0 0 0 1 CLINICAL LABORATORY 6 2 3 1 2 1 0 0 1 0 0 0 1 TESTS SERVICES OF OTHER HEALTH 6 2 3 2 1 1 0 0 1 0 0 0 1 PROFESSIONALS 6 3 1 1 1 HOSPITALIZATION SERVICES 1 0 0 1 0 0 0 1 7 1 1 1 1 NEW AUTOMOBILES 1 0 0 0 1 0 1 0 PREVIOUSLY USED 7 1 1 2 1 1 0 0 0 1 0 1 0 AUTOMOBILES 7 1 2 1 1 MOTORCYCLES 1 0 0 0 1 0 1 0 7 1 3 1 1 BICYCLES 1 0 0 0 1 0 1 0 SPARE PARTS FOR THE 7 2 1 1 1 ELECTRICAL OPERATION OF 1 0 0 0 1 0 1 0 AUTOMOBILES 7 2 1 1 2 TIRES AND RIMS 1 0 0 0 1 0 1 0 SPARE PARTS AND ACCESSORIES FOR THE 7 2 1 1 3 1 0 0 0 1 0 1 0 MECHANICAL OPERATION OF AUTOMOBILES 7 2 2 1 1 GASOLINE 0 0 0 0 1 1 1 0 7 2 2 1 2 DIESEL FUEL 0 0 0 0 1 1 1 0 LUBRICANTS AND OILS FOR 7 2 2 2 1 0 0 0 0 1 1 1 0 AUTOMOBILES MAINTENANCE AND REPAIR 7 2 3 1 1 1 0 0 1 0 0 0 1 SERVICES OF AUTOMOBILES 7 2 3 1 2 CAR WASH SERVICE 1 0 0 1 0 0 0 1 7 2 4 1 1 PARKING SERVICE 1 0 0 1 0 0 0 1 7 2 4 2 1 TOLL SERVICES 1 0 0 1 0 0 0 1 7 2 4 2 2 DRIVER'S LICENSES 1 0 0 1 0 0 0 1 7 2 4 2 3 ROADWORTHINESS TESTS 1 0 0 1 0 0 0 1 SHARED-TAXI 7 3 1 1 1 1 0 0 1 0 0 0 1 TRANSPORTATION SERVICES TAXI TRANSPORTATION 7 3 1 1 2 1 0 0 1 0 0 0 1 SERVICES SCHOOL BUS 7 3 1 1 3 1 0 0 1 0 0 0 1 TRANSPORTATION SERVICES URBAN BUS 7 3 1 1 4 1 0 0 1 0 0 0 1 TRANSPORTATION SERVICES 7 3 1 1 5 SHUTTLE SERVICES 1 0 0 1 0 0 0 1 INTERURBAN BUS 7 3 1 2 1 1 0 0 1 0 0 0 1 TRANSPORTATION SERVICES

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Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products AIR TRANSPORTATION 7 3 2 1 1 1 0 0 1 0 0 0 1 SERVICES MULTIMODE 7 3 3 1 1 1 0 0 1 0 0 0 1 TRANSPORTATION SERVICES MOBILE TELEPHONE 8 1 1 1 1 1 0 0 0 1 0 1 0 DEVICES INTERNET CONNECTION 8 2 1 1 1 1 0 0 1 0 0 0 1 SERVICES MOBILE BROADBAND 8 2 1 1 2 1 0 0 1 0 0 0 1 SERVICES BUNDLED 8 2 1 1 3 TELECOMMUNICATION 1 0 0 1 0 0 0 1 SERVICES MOBILE TELEPHONE 8 2 1 1 4 1 0 0 1 0 0 0 1 SERVICES FIXED-LINE TELEPHONE 8 2 1 1 5 1 0 0 1 0 0 0 1 SERVICES 9 1 1 1 1 TELEVISION SETS 1 0 0 0 1 0 1 0 9 1 1 2 1 SOUND EQUIPMENT 1 0 0 0 1 0 1 0 PORTABLE AUDIO AND 9 1 1 2 2 1 0 0 0 1 0 1 0 VIDEO PLAYERS 9 1 2 1 1 PHOTOGRAPHIC CAMERAS 1 0 0 0 1 0 1 0 9 1 3 1 1 COMPUTERS 1 0 0 0 1 0 1 0 9 1 3 1 2 PRINTERS 1 0 0 0 1 0 1 0 9 1 4 1 1 DIGITAL STORAGE DEVICES 1 0 0 0 1 0 1 0 9 2 1 1 1 TOYS 1 0 0 0 1 0 1 0 9 2 1 1 2 VIDEO GAME CONSOLES 1 0 0 0 1 0 1 0 9 2 2 1 1 SPORTS EQUIPMENT 1 0 0 0 1 0 1 0 9 2 2 1 2 CAMPING EQUIPMENT 1 0 0 0 1 0 1 0 9 2 2 1 3 MUSICAL INSTRUMENTS 1 0 0 0 1 0 1 0 9 2 3 1 1 FLOWERS 1 0 0 0 1 0 1 0 9 2 3 1 2 PLANTS 1 0 0 0 1 0 1 0 9 2 4 1 1 PET FOOD 1 0 0 0 1 0 1 0 9 2 4 1 2 PET ACCESSORIES 1 0 0 0 1 0 1 0 9 2 5 1 1 VETERINARY SERVICES 1 0 0 1 0 0 0 1 SERVICES PROVIDED BY 9 3 1 1 1 1 0 0 1 0 0 0 1 RECREATIONAL CENTERS ENTRANCE FEES FOR 9 3 1 1 2 1 0 0 1 0 0 0 1 SPORTING EVENTS ENTRANCE FEES FOR 9 3 1 1 3 1 0 0 1 0 0 0 1 NIGHTCLUBS 9 3 1 1 4 BIRTHDAY PARTY SERVICES 1 0 0 1 0 0 0 1 9 3 1 1 5 GYMNASIUMS 1 0 0 1 0 0 0 1 9 3 1 2 1 SPORTS CLASSES 1 0 0 1 0 0 0 1 9 3 1 2 2 RECREATION CLASSES 1 0 0 1 0 0 0 1 9 3 2 1 1 CINEMA TICKETS 1 0 0 1 0 0 0 1 ENTRANCE FEES FOR 9 3 2 1 2 1 0 0 1 0 0 0 1 CULTURAL EVENTS 9 3 2 2 1 PHOTOGRAPHY SERVICES 1 0 0 1 0 0 0 1 PAID RESIDENTIAL 9 3 2 3 1 1 0 0 1 0 0 0 1 TELEVISION SERVICES ONLINE SUBSCRIPTION 9 3 2 3 2 1 0 0 1 0 0 0 1 SERVICES 9 3 3 1 1 GAMES OF CHANCE 1 0 0 1 0 0 0 1 9 4 1 1 1 TEXTBOOKS 1 0 0 0 1 0 1 0 9 4 1 2 1 BOOKS 1 0 0 0 1 0 1 0 9 4 2 1 1 NEWSPAPERS 1 0 0 0 1 0 1 0 9 4 3 1 1 NOTEBOOKS 1 0 0 0 1 0 1 0 9 4 3 1 2 ART SUPPLIES 1 0 0 0 1 0 1 0 9 4 3 2 1 STATIONERY 1 0 0 0 1 0 1 0

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Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products 9 5 1 1 1 PACKAGE TOURS 1 0 0 1 0 0 1 0 PRE-PRIMARY EDUCATION 10 1 1 1 1 1 0 0 1 0 0 0 1 SERVICES KINDERGARTEN EDUCATION 10 1 1 1 2 1 0 0 1 0 0 0 1 SERVICES FIRST PHASE OF PRIMARY 10 1 1 1 3 EDUCATION (FIRST TO 1 0 0 1 0 0 0 1 FOURTH GRADE) SECOND PHASE OF PRIMARY 10 1 1 1 4 EDUCATION (FIFTH TO 1 0 0 1 0 0 0 1 EIGHTH GRADE) SECONDARY EDUCATION 10 2 1 1 1 1 0 0 1 0 0 0 1 SERVICES UNIVERSTIY PREPARATION 10 3 1 1 1 1 0 0 1 0 0 0 1 SERVICES TRAINING IN TECHNICAL 10 4 1 1 1 1 0 0 1 0 0 0 1 CENTERS 10 4 1 1 2 PROFESSIONAL INSTITUTES 1 0 0 1 0 0 0 1 10 4 1 1 3 UNIVERSITY EDUCATION 1 0 0 1 0 0 0 1 POSTGRADUATE 10 4 1 1 4 1 0 0 1 0 0 0 1 EDUCATION 10 5 1 1 1 TRAINING COURSES 1 0 0 1 0 0 0 1 FOOD CONSUMED OUTSIDE 11 1 1 1 1 1 0 0 1 0 0 0 1 THE HOME SANDWICHES AND HOT 11 1 1 1 2 DOGS CONSUMED OUTSIDE 1 0 0 1 0 0 0 1 THE HOME ALCOHOLIC BEVERAGES 11 1 1 1 3 CONSUMED OUTSIDE THE 1 0 0 1 0 0 0 1 HOME NON-ALCOHOLIC 11 1 1 1 4 BEVERAGES CONSUMED 1 0 0 1 0 0 0 1 OUTSIDE THE HOME ICE CREAM AND DESSERTS 11 1 1 1 5 CONSUMED OUTSIDE THE 1 0 0 1 0 0 0 1 HOME 11 1 1 2 1 TAKE-OUT FOOD 1 0 0 1 0 0 0 1 ACCOMMODATION 11 2 1 1 1 1 0 0 1 0 0 0 1 SERVICES FOR TOURISTS 12 1 1 1 1 HAIRDRESSING 1 0 0 1 0 0 0 1 SERVICES PROVIDED IN 12 1 1 1 2 1 0 0 1 0 0 0 1 BEAUTY SALONS ELECTRIC RAZORS AND HAIR 12 1 2 1 1 1 0 0 0 1 0 1 0 REMOVAL MACHINES 12 1 2 1 2 DISPOSIBLE RAZORS 1 0 0 0 1 0 1 0 MISCELLANEOUS ITEMS FOR 12 1 2 1 3 1 0 0 0 1 0 1 0 PERSONAL CARE 12 1 2 1 4 SUNSCREENS 1 0 0 0 1 0 1 0 12 1 2 1 5 COLOGNES AND PERFUMES 1 0 0 0 1 0 1 0 DEODORANTS AND 12 1 2 1 6 1 0 0 0 1 0 1 0 ANTIPERSPIRANTS 12 1 2 2 1 ORAL HYGIENE PRODUCTS 1 0 0 0 1 0 1 0 12 1 2 2 2 TOILET PAPER 1 0 0 0 1 0 1 0 12 1 2 2 3 SOAP 1 0 0 0 1 0 1 0 12 1 2 2 4 DISPOSABLE DIAPERS 1 0 0 0 1 0 1 0 FEMNINE HYGIENE 12 1 2 2 5 1 0 0 0 1 0 1 0 PROTECTION SHAMPOO AND 12 1 2 2 6 1 0 0 0 1 0 1 0 CONDITIONER 12 1 2 3 1 SKIN CREAMS 1 0 0 0 1 0 1 0

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Index of CPI minus Fresh Fruit Index of Non- D G C SC P DESCRIPTION CPI 2018=100 Food and and Food Services Goods Energy Tradable tradable Energy Vegetables Products Products 12 1 2 3 2 MAKEUP 1 0 0 0 1 0 1 0 12 1 2 3 3 HAIR DYES AND HAIRSPRAY 1 0 0 0 1 0 1 0 12 2 1 1 1 JEWELRY 1 0 0 0 1 0 1 0 12 2 1 1 2 WATCHES 1 0 0 0 1 0 1 0 ARTICLES FOR TRANSPORT 12 2 2 1 1 1 0 0 0 1 0 1 0 OF PERSONAL EFFECTS ARTICLES FOR TRANSPORT 12 2 2 1 2 1 0 0 0 1 0 1 0 OF INFANTS 12 2 2 1 3 SUNGLASSES 1 0 0 0 1 0 1 0 12 3 1 1 1 INSURANCE 1 0 0 1 0 0 0 1 12 4 1 1 1 FINANCIAL EXPENDITURES 1 0 0 1 0 0 0 1 12 5 1 1 1 ISSUANCE OF CERTIFICATES 1 0 0 1 0 0 0 1 12 5 1 1 2 PHOTOCOPY SERVICES 1 0 0 1 0 0 0 1 MEMBERSHIP IN 12 5 1 1 3 PROFESSIONAL 1 0 0 1 0 0 0 1 ORGANIZATIONS 12 5 1 1 4 NOTARY SERVICES 1 0 0 1 0 0 0 1 12 5 1 1 5 FUNERAL SERVICES 1 0 0 1 0 0 0 1 FEES FOR 12 5 1 1 6 PARENT/GUARDIAN 1 0 0 1 0 0 0 1 CENTERS NURSING HOME CARE FOR 12 5 1 1 7 1 0 0 1 0 0 0 1 THE ELDERLY 12 5 1 1 8 CHILD DAY CARE SERVICES 1 0 0 1 0 0 0 1

Source: National Statistics Institute (INE)

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METHODOLOGICAL MANUAL OF THE CONSUMER PRICE INDEX BASE YEAR 2018=100

www.ine.cl

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