Purchasing power index (general purchasing power index, PPI)– an economic indicator most often used to assess the attractiveness of a particular product.

Purchasing Power Index shows how many goods and services can be purchased per unit of currency. Changes accordingly IPS index indicate the dynamics of inflation in the country and the stability of the currency as a whole. The higher the prices, the lower the purchasing power of the currency, and vice versa.

Why do we need a purchasing power index?

The purchasing power index is used to analyze changes in the volume of goods and services that the population can afford to purchase for the same amount in the current year and the year being studied. This index also reflects the relationship between nominal and real wages of the population. The value of the purchasing power index is the inverse of the commodity price index or tariffs.

The purchasing power of money in a particular state depends on the level of wealth of one person and at the same time is an indicator of the well-being of the entire population of the country. When purchasing power begins to increase sharply, the country experiences a wave of shortages, when demand becomes greater than supply, and people, sensing the opportunity to buy more, begin to actively use it. Therefore, the growth of purchasing power is not an unambiguously positive phenomenon. When there is a shortage, there is a desire for equilibrium, to achieve which it is necessary to either increase production volumes or raise prices. As you can imagine, increasing is much more difficult than simply raising prices, so the second option is much more common when there is a shortage.

When the purchasing power of money decreases, this, of course, also does not bring anything good, affecting both the economy of a particular country and the economy of the whole world. Unlike the process of increasing purchasing power, its decrease leads to inflation. And in a particularly “neglected” case, the monetary unit may simply depreciate. Then, for the same amount, the consumer will be able to purchase fewer goods or services. The depreciation of some world currencies will create problems for the entire global economy. This, for example, can happen with the dollar, the world currency.

Every year, many developed countries conduct research using inflation statistics and price dynamics. These studies are intended to provide information that is necessary for a prompt response to possible crises in different countries of the world. Along with price statistics, an indicator of the purchasing power of money is also given.

How is purchasing power index (formula) calculated?

To calculate the purchasing power index, the following formula is used:

Its value shows the relative change in the purchasing power of money in the hands of the population. If, for example, inflation in the consumer sector was 12.5% ​​for the year (prices for consumer goods and services increased by 12.5% ​​on average), this means that CPI = 1.125 and IPI = 1/1.125 = 0.889.

The result shows that the purchasing power of money decreased by an average of 11.1%, i.e. for the same amount of money, the population will buy 11.1% less goods than in the base period, or, otherwise, maintaining a constant standard of living today costs 11.1% more than yesterday.

In the conditions of market relations in the economy, a special place among the indices of quality indicators is given to the price index. Using the price index, we carry out assessment of price dynamics for industrial and non-productive consumption goods, recalculation of the most important cost indicators SNA from actual prices to comparable ones. Price index is common inflation meter in macroeconomic research, it is used when adjusting the legally established minimum wage, setting tax rates, etc.

To characterize price dynamics at the consumer level, a summary consumer price index(CPI), which reflects the dynamics of final consumption prices. It measures the overall change in the cost of a fixed set of consumer goods and services, called the "consumption basket." The set of goods and services developed for price monitoring representatively includes goods and services of mass consumer demand, as well as certain goods and services of optional use (passenger cars, gold jewelry, car maintenance, etc.). The selection of items was made taking into account their relative importance for consumption by the population, representativeness in terms of reflecting the dynamics of prices for homogeneous goods, and their stable availability on sale.

Under the federal structure of Russia, monitoring of changes in prices (tariffs) is carried out on the territory of all constituent entities of the Russian Federation.

Observation is carried out at trade and service enterprises of all types of ownership and types of trade (state, municipal, cooperative, joint-stock, rental, private, commercial) and in markets.

In conditions of unstable economic development, when calculating the CPI at monthly intervals, the set of the consumer basket changes annually. In 1999, the consumer package included 414 goods and services: 104 items were food products, 225 were non-food products and 85 were paid services.

Along with the monthly registration of prices for the full list of goods and services, weekly registration of prices and tariffs for goods and services included in the required social set is carried out, and its estimated cost is monitored (37 items in total). In addition, the cost of a set of 25 essential food products is calculated on a weekly basis, corresponding to consumption standards developed by the Institute of Nutrition of the Russian Academy of Medical Sciences together with the Institute of Socio-Economic Problems of Population of the Russian Academy of Sciences and the Russian Ministry of Labor.

Consumer price index characterizes the change over time in the general level of prices for goods and services purchased by the population for non-productive consumption. It measures the ratio of the value of the actual fixed set of goods and services in the current period to its value in the previous (base) period:

The calculation of the consumer price index is carried out:

To the previous month (or period);

By December of the previous year (or quarter);

To the corresponding month (or period) of the previous year, for example, January 1999 to January 1998.

The consumer price index is one of the most important indicators characterizing the level of inflation and is used for the purposes of implementing state financial policy, analyzing and forecasting price processes in the economy, regulating the real exchange rate of the national currency, revising minimum social guarantees, and resolving legal disputes.

The urgent need to determine the national inflation rate became a key factor in the development of Russia's temporary CPI. The requirements of international methodology require the use of the Laspeyres formula for these purposes, and not the Paasche formula. For the current situation in Russia, the most flexible is the operational use of the following variant of the Laspeyres formula:

The CPI is calculated at weekly, monthly, quarterly intervals, as well as on a cumulative basis for the period from the beginning of the year.

Calculation for a month, quarter, period from the beginning of the year is made chip" method, those. by multiplying weekly (monthly, quarterly) consumer price indices.

The chain process used facilitates the introduction of new products or their substitution when the need arises. It reflects price changes well “from the consumer’s point of view.”

The consolidated CPI is calculated at the federal level for the entire population. In addition, since 1994, CPI calculations have been organized by population groups (“workers and employees”, “pensioners”). At the same time, the possibility of conducting experimental calculations of price indices for population groups with different income levels is being considered.

The methodology for calculating the CPI involves calculating the index for individual regions, product groups and services.

Due to shortcomings in pricing in connection with the liberalization of prices, their rapid growth, privatization of trade, the creation of new private retail outlets, the emergence of a significant number of informal or, as they are called, “black” markets, it is necessary to change the methodology for calculating the CPI more flexibly and more quickly. The composite index calculated using the Laspeyres formula tends to overestimate inflation because during periods when prices rise, consumers replace expensive goods with cheaper ones, so the Laspeyres index should be used carefully in conditions of high inflation.

As information becomes available about the structure of consumer spending in the current period, Russian statistical authorities have the opportunity to make retrospective calculations of the CPI also using the Paasche formula.

Rosstat is interested in creating an independent consumer price index that meets international standards. Therefore, the methodology for calculating the CPI in Russia is constantly being improved. The values ​​of consumer price indices, calculated by year and month, are published in official publications. For example, the consumer price index of the Russian Federation:

2000	2001	2002	2003	2004	2005
20,2	18,6	15,1	12,0	11,7	15,2

Source: Russia in numbers. 2006: Krat. stat. Sat./Rosstat. M., 2006. P. 397.

The consumer price index is a kind of barometer of the country’s standard of living, the well-being of each family, each person. It is traditionally called cost of living index. The CPI basket of goods and services is fixed so that a given standard of living corresponds to the same index value. With this approach, changes in the index can only be caused by changes in prices, but not by changes in the structure of consumption as a result of changes in income or the emergence of new goods.

The consumer price index is taken as deflator index when finding real cash income, real wages based on their nominal values:

Along with the calculation of the CPI, there is a need to calculate producer price index industrial, agricultural, construction and other products. These indices can be used as one of the main indicators of inflation processes in the manufacturing sector. Price indices of manufacturing enterprises are formed on the basis of changes in prices of these enterprises. Monitoring of changes in producer prices is carried out across a sample network of base enterprises of various forms of ownership and organizational and legal forms.

Industrial producer price indices characterize the dynamics of prices of enterprises producing industrial products. The calculation of these indices is carried out based on a set of goods - representatives of industrial products, which includes the most important types of products of individual industries, occupying the largest share in the output of commercial products in a given industry.

The sum of the value of representative goods is at least half of the commodity output of each industry and sub-industry, which ensures the representativeness of the calculated indices.

Inflation leads to a decrease in the purchasing power of money.

Purchasing power of money – the number of goods and services that can be purchased for one monetary unit (in our country - for 1 ruble) at a given level of prices and tariffs.

Purchasing power of the ruble is determined as an index inverse to the index of prices and tariffs for services:

The ruble purchasing power index is used to measure inflation: it shows how many times money has depreciated.

So, if in 2005 the consumer price index (tariffs) for goods and paid services to the Russian population was 115.2%, i.e. prices increased by 15.2%, then the purchasing power of the ruble in 2005 decreased by 13%:

I p.s.r = 1: 1.152 = 0.87;

(1 – 0,86) ∙ 100 = 13%.

It is possible to increase and strengthen the purchasing power of the ruble only by establishing the correct relationships between supply and demand. To ensure these conditions, it is necessary to stabilize the economy and make it efficient.

Inflation statistics

Inflation– depreciation of paper money and non-cash funds, accompanied by rising prices on goods and services in the economy associated with disruption of the functioning of the country's monetary and financial system. Inflation is a category that refers to a decrease in the purchasing power of money. It manifests itself:

In the depreciation of money in relation to goods, gold, foreign currencies;

Rising commodity prices;

Increase in the market price of gold;

A fall in the exchange rate of the national currency against foreign currencies.

Inflation is an inevitable companion of a market economy of any country.

Main causes of inflation:

Disproportion in the structure of production, excessive share of means of production;

State budget deficit;

Increase in public debt;

Swelling of the volume of long-term capital investments, including through credit.

All the variety of reasons can be reduced to two main approaches: monetarist (monetary) and non-monetarist.

According to monetarist approach The reason for inflation lies in the faster increase in the money supply compared to the growth in the volume of real product. An excess of money leads to its depreciation and, as a result, an increase in prices. Thus, inflation is determined by the rate of price growth.

Price growth rate (inflation rate) calculated by the formula:

However, the quantity theory of money as a method of mainly ensuring inflation is subject to serious criticism. Thus, not every price increase can be identified with inflation. The fact is that, firstly, yen can rise as a result of rising production costs, and this is a natural process if it is associated with deteriorating conditions for the extraction of natural raw materials. Such price increases cannot be called inflation. Secondly, an increase in prices may be associated with an increase in the quality of goods, the release of new goods that correspond to modern fashion, etc. In this case, we also cannot talk about inflation.

The rise in prices caused by inflation has other reasons and features. Its external manifestations are:

Massiveness, i.e. increase in prices for almost all goods;

Continuity of price increases;

The duration of their growth.

In practice, it is quite difficult to distinguish between inflationary and non-inflationary price increases. This is one of the difficulties of economic analysis of inflation.

When considering the nature of inflation, open and suppressed inflation are distinguished.

– Open inflation manifests itself in various forms:

Demand inflation;

Production cost inflation;

Structural inflation.

Some supporters non-monetarist (Keynesian) theory believe that inflation is generated by an excess of aggregate demand, which for one reason or another cannot be kept up with by production (demand inflation); others explain inflation by rising production costs (cost-push inflation), which leads to different price increases in the consumer market and wage growth.

Structural inflation characterized by macroeconomic intersectoral imbalance (during periods of a radical transition of the country to new economic conditions, conversion of military production, etc.).

– Depressed inflation characteristic of an administrative economy with regulated prices, it manifests itself in commodity shortages, the collapse of the consumer market, the development of barter transactions, excess money supply on hand, etc. With the liberalization of prices, inflation goes into an open form (since January 1992), characterized by a continuous rise in prices for goods and services.

Inflation rate statistics measures using a system of price indexes, the most important components of which are GDP deflator index, and to measure inflation of consumer goods and services purchased by the final buyer - consumer price index(CPI).

The main indicator of inflation dynamics is inflation rate:

The inflation rate shows by what percentage the inflation rate has changed over a given period of time.

It is generally accepted that if the monthly inflation rate is less than 10%, then there is “creeping” inflation (typical of industrialized countries), and if 10-99%, then “galloping” inflation (typical of developing countries and countries with economies in transition) . In the case of 50% inflation per month, the economy is “sick” of hyperinflation.

Thus, as a result of price liberalization, a hyperinflationary “explosion” was observed in Russia in 1992.

In addition to the main (generalizing) inflation indicators, statistics calculate indicators characterizing inflation rate in individual sectors of the economy etc. (producer price index, wholesale price index for individual goods, final and intermediate products, raw materials and materials).

Inflation leads to devaluation monetary unit of the country, i.e. to reduce its exchange rate in relation to the currencies of other countries, carried out by law.

One of the indicators of inflation is the index of the official exchange rate of the ruble to the US dollar. The dynamics of the official US dollar exchange rate set by the Central Bank of the Russian Federation is given in table. 21.1.

Purchasing power reflects the relationship between the cost of products and the means of payment. It is directly dependent on the prices of goods, the structure of trade turnover and the money supply in circulation.

An increase in the purchasing power of money is possible with the development of the manufacturing sector, a reduction in the amount of money in circulation and a high level of confidence in the national currency.

Due to constant price fluctuations, purchasing power in different markets may vary significantly. For convenience, analysts use purchasing power parity. To calculate it, a certain exchange rate is set, the cost of a set of goods and services is taken as a basis, and after that they calculate how much goods and services citizens of different countries can purchase for the same amount of money.

Calculation of purchasing power

The purchasing power of money can be calculated in two ways:

• Intensive. Determining the quantity of goods that a person can buy to satisfy necessary needs. We are talking about food, clothing, payment for utilities and travel on public transport.
• Extensive. Calculation of the amount of goods and services a person can afford without taking into account his basic needs. This category includes spending on luxury goods, entertainment and leisure expenses.

When analyzing total purchasing power, both calculation methods are taken into account.

Purchasing Power Index

The purchasing power index is used to analyze changes in the volume of goods and services that can be purchased for the same amount in the current year and the year under study. To calculate the purchasing power index, the following formula is used:

IPI=1/Consumer Price Index

The parameter shows the relationship between real and nominal wages of the population, since its value reflects changes in the purchasing power of money.

Conditions.

The average monthly salary of workers in consumer cooperatives in the region in current prices was 2,000 rubles in the base year, and 2,400 rubles in the reporting year. Consumer prices in the reporting year increased by 25% compared to the base year. The share of taxes in wages was 12% in the base year, and 14% in the reporting year.

Define:

) Nominal wage index;

) Real wage index.

) The index of purchasing power of money is determined by the formula:

where PC is the consumer price index in the reporting year, according to the condition it is equal to 1+25%/100%=1.25.

The purchasing power index will be:

.

where is the average nominal wage in the base and reporting periods.

In the calculation, we take into account the share of taxes in wages (w), then the formula will take the form:

.

We get:

.

We get:

.

We can conclude that the purchasing power of money has decreased by 0.8 times. Nominal wages, in turn, increased by 1.173 times, and real wages decreased by 0.938 times.

The Consumer Price Index (CPI) characterizes the change over time in the general level of prices for goods and services purchased by the population for non-productive consumption. The CPI is one of the most important indicators characterizing the standard of living of the population.

The CPI applies:

· to assess changes in the cost of living and the level of inflation in the country;

· to revise government social programs (the basis for increasing the minimum wage, indexing the cost of living, indexing the minimum pension, justifying subsidies and price subsidies that do not allow a decrease in the level of population consumption of essential goods and services);

· in determining state policy in the field of finance, regulating the real exchange rate of the national currency, analyzing and forecasting price processes;

· to convert indicators of the system of national accounts from current to comparable prices.

To characterize changes in prices for consumer goods and services, a system of indices is used, with the help of which it is possible to solve various problems. This system is formed by:

· consolidated CPI, which characterizes the change in a fixed (basic) complete set of goods and services purchased on average per family;

· consolidated CPI, which characterizes the change in the cost of a fixed set of goods and services, with the exception of undesirable goods (alcoholic beverages and tobacco products);

· a consolidated CPI showing the change in the cost of a fixed set of goods and services excluding non-essential goods (luxury goods, gold jewelry, cars, and especially fashionable goods);

· cost of living index, characterizing the change in the cost of a fixed set of 25 basic food products;

· index of the control cost of the necessary social set, characterizing the change in the cost of a fixed set of basic consumer goods and services traditional for the population of the Russian Federation, the composition and volumes of consumption of which are necessary to ensure human life and preserve his health (37 items);

· CPI for certain socio-demographic groups of the population.

The CPI measures the change in the value of a fixed set of goods and services in the current period compared to its value in the previous (base) period.

The “basket” of basic consumer goods and services is fixed so that changes in the CPI cause only changes in prices and not changes in consumption patterns resulting from changes in income or the purchase of other goods. Therefore, the CPI is also called the cost of living index.

The consumer “basket” for calculating the CPI includes representatively:

goods and services of mass consumer demand,

· individual goods and services of optional use (jewelry, furs, cars, car maintenance and others).

For international comparisons, the CPI is used for the entire range of goods consumed.

The CPI excluding non-essential goods is used to measure inflation.

Calculation of the CPI includes the following steps:

· sampling of geographic boundaries of observation;

· selection of basic trade and service enterprises;

· selection of representative goods and representative services;

· registration of prices for goods and tariffs for paid services;

· formation of a structure of weights for calculating the consumer market price index;

· calculation of the consumer price index;

· calculation of average prices (tariffs) for goods and services.

To calculate the CPI, two sources of information are used:

a) statistical observation of changes in prices and tariffs in the consumer market;

b) sample surveys of household income, expenditure and consumption (provide data on the structure of actual consumer expenditures of the population for the previous year).

To determine the weights in the CPI, in addition to the household survey, additional information is also used: data on the structure of retail trade turnover, on the production of certain types of products, expert estimates.

In 1991, a special state service for monitoring and recording changes in prices and tariffs was created under the State Statistics Committee of the Russian Federation. Within the framework of this service, regular continuous monitoring of the level and dynamics of consumer prices and calculation of the CPI was organized throughout Russia.

In each region, in addition to the administrative center, the most important regional centers from the point of view of socio-economic development and geographical location with a fairly high degree of saturation of the consumer market are selected.

Regional state statistics bodies, using the main array method, select basic trade and service enterprises in their region. Enterprises of all forms of ownership and organizational and legal forms are representatively included in the scope of observation.

Registration of prices is carried out according to a single set of goods (services) for all regions of the Russian Federation - representatives most frequently consumed by the population.

The consumer set for calculating the CPI consists of three large groups:

· Foodstuffs,

· Non-food products,

· paid services provided to the population.

Each group is represented by goods (services) or small product subgroups.

This consumer set is formed at the federal level and remains unchanged for a long time (usually at least a year).

In each specific region, the general description of the product group is detailed by those representative products that occupy a significant volume in the regional consumer market and will be offered for a long time. The selection of a representative product from the product group it represents is made taking into account the mass demand (the share of this product in the volume of sales of the product group) and the regularity of its sale at the base enterprise.

To calculate the CPI, the formula is used Laspeyres price index, but not an aggregate form, but a weighted arithmetic average of individual price indices, calculated based on indicators of the cost structure. The weight is the share of consumer expenditures of the population on a certain representative product.

The Laspeyres price formula is transformed as follows:

,

where Q 0 is the cost of an individual product in the consumer “basket” of the base period;

The share of household expenditures on a specific j-th product in the total volume of consumer expenditures in the base period;

Individual basic price index for the j-th representative product,

Average prices of goods for the current and base periods, respectively. They are calculated as simple arithmetic averages of prices recorded at selected reference outlets:

where M is the number of retail outlets.

The index shows how many times (or by what percentage) consumer spending would change in the current period compared to the previous one if the level of consumption remained the same when prices changed.

The formula with individual basis indices is difficult to use because... Over long periods of time, the range of goods sold changes, goods are replaced, and the structure of commodity flows changes. Therefore, the individual basic price index is calculated as the product of chain individual price indices:

The use of chain price comparisons facilitates the introduction of new products or their substitution when the need arises.

When calculating the price index using the Laspeyres formula, three questions need to be resolved:

· selection of a base year for constant weights,

· determination of the period for using weighting coefficients without revising them,

· linking the index calculated after the revision of the weights with previously existing time series of price indices.

The calculation of the consolidated CPI is carried out on a monthly, quarterly basis, as well as on an accrual basis for the period from the beginning of the year. The CPI is calculated monthly for the previous month of the current year and for the corresponding month of the previous year, as well as on a cumulative basis from the beginning of the year to the corresponding period of the previous year. The calculation of price indices for a quarter, half-year, period from the beginning of the year is carried out using the chain method, i.e. by multiplying monthly consumer price indices.

Statistics show that the use of the Laspeyres formula tends to overestimate the actual price change. Thus, if prices for some consumer goods increase relative to other goods, then consumers reduce spending on these goods. By replacing more expensive goods with some cheaper ones, consumers can buy a set of goods and services that is adequate to the previous one, but it will cost them less than it would have cost them to buy the previous set at the new prices.

The consumer price index calculated using this formula does not take into account qualitative changes. If the quality of goods and services improves, their prices should also increase. However, it is assumed that the entire increase in the monetary value of the consumer “basket” is entirely caused by inflation, and not by an improvement in the quality characteristics of goods and services. Consequently, calculations based on a fixed set are correct only for a short period of time, if during this time there are no significant quantitative and qualitative changes in the structure of consumer spending. Under these conditions, the CPI will adequately reflect changes in the cost of living.

The consumer price index using the modified Laspeyres formula is calculated at the regional and federal levels.

The consolidated price index for Russia is calculated as a weighted average of regional indices, the weight being the share of the population of the corresponding region in the total population:

where is the consumer price index in the k-th region;

Share of the kth region in the total population of Russia.

This methodology for calculating the CPI is uniform for many countries, allowing for international comparisons. All major industrial countries regularly publish their own consumer price indices.

In the UK, this index is called the Retail Price Index, has been calculated since 1914 and is published monthly by the Central Statistics Office. Weight characteristics change annually based on the results of a survey of the expenses of the “average family”. Two “pensioner” indices are calculated separately, which take into account the weighting characteristics of the expenses of single pensioners or families with two pensioners, respectively.

In the United States, the consumer price index has been calculated since 1919. Its main purpose is to reflect the level of inflation in the country and serve as a basis for wage negotiations. Moreover, two versions of the consumer price index are calculated. One is for employees living in urban areas, the other is for persons living in non-urban areas. In addition, indices are calculated that take into account changes in taxation, social insurance and protection.

Money Purchasing Power Index calculated as the reciprocal of the CPI:

Its value shows the relative change in the purchasing power of money in the hands of the population. If, for example, inflation in the consumer sector was 12.5% ​​for the year (prices for consumer goods and services increased by 12.5% ​​on average), this means that the CPI = 1.125, and . The result shows that the purchasing power of money decreased by an average of 11.1%, i.e. for the same amount of money, the population will buy 11.1% less goods than in the base period, or, otherwise, maintaining a constant standard of living today costs 11.1% more than yesterday.

Literature

1. Dolzhenkova V.G. PRICE STATISTICS: Textbook. - M.: Information and Publishing House "Filin", Rilant, 2000

2. Voronin V.F., Zhiltsova Yu.V. STATISTICS: Textbook. manual for universities. – M.: Economist, 2004

3. STATISTICS OF THE MARKET FOR GOODS AND SERVICES: Textbook. – 2nd ed. reworked and additional / I.K. Belyaevsky, G.D. Kulagina, L.A. Danchenok and others; Ed. I.K. Belyaevsky. – M.: Finance and Statistics, 2002

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