Harmonized indices of consumer prices (HICPs) : a short guide for users.
Date: 2004-10-10
Institutions: Eurostat
Subjects: consumer price, economic indicator, harmonisation of prices, user guide

N
O

I
T
I

D
E

4
0
0
2

Harmonized Indices
of Consumer Prices
(HICPs)

A Short Guide for Users

March 2004

E U R O P E A N
C O M M I S S I O N

2

THEME 2
Economy 
and  
finance

 
Europe Direct is a service to help you find answers to your questions about the European Union

New freephone number:
00 800 6 7 8 9 10 11

A great deal of additional information on the European Union is available on the Internet.
It can be accessed through the Europa server (http://europa.eu.int).

Luxembourg: Office for Official Publications of the European Communities, 2004

ISBN 92-894-7081-X
ISSN 1725-0048

© European Communities, 2004

HARMONIZED INDICES OF CONSUMER PRICES 

A SHORT GUIDE FOR USERS 

TABLE OF CONTENTS 

1.  

Introduction to the HICPs .................................................................................3  

2.  Conceptual basis and coverage of the HICPs ..................................................4 

3.  Accessing HICP data and metadata .................................................................5 

4.  Basic points on the calculation of HICPs ..........................................................6 

5. 

The HICPs – price stability and international comparisons...............................7 

6. 

The harmonisation process ..............................................................................8 

7. 

Further technical issues for harmonisation .......................................................9 

8.  Regulations on the HICP ..................................................................................9 

9. 

Future steps on harmonisation .......................................................................11 

Further information on HICPs .............................................................................13 

Contact points .........................................................................................................13 

Other useful links ....................................................................................................13 

ANNEX - Complete list of HICP Regulations ...................................................14  

(cid:4) 

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

HARMONIZED INDICES OF CONSUMER PRICES (HICPs) 

A SHORT GUIDE FOR USERS 

This  guide  provides  a  brief  description  of  the  Harmonised  Indices  of  Consumer  Prices 
(HICPs).  Its  target  audience  is  non-specialist  users  of  the  HICPs,  including  analysts  and 
commentators, who wish to gain a general overview of these price indices.  

This  guide  also  provides  references  and  links  to  more  detailed  information  on  the  HICPs 
and  a  list  of  contact  points  for  further  information.  A  list  of  all  the  legally  binding 
Regulations on the HICP is annexed to this guide. 

1.  

Introduction to the HICPs  

Consumer Price Indices (CPIs) are economic indicators constructed to measure the changes 
over  time  in  the  prices  of  consumer  goods  and  services  acquired,  used  or  paid  for  by 
households.  

CPIs are used for a wide variety of purposes, including: as a guide for monetary policy; for 
the  indexation  of  commercial  contracts,  wages,  social  protection  benefits  or  financial 
instruments; as a tool for deflating the national accounts or calculating changes in national 
consumption or living standards. 

The  HICPs  are  a  set  of  EU  Consumer  Price  Indices  calculated  according  to  a  harmonised 
approach and a single set of definitions. The key HICPs are: 

•  The  Monetary  Union  Index  of  Consumer  Prices  (MUICP)  –  aggregate  indices 

covering the countries within the euro-zone. 

•  The  European  Index  of  Consumer  Prices  (EICP)  –  for  the  euro-zone  plus  the 

other EU countries. 

•  The national HICPs – for each of the EU Member States. 

Beyond  these,  there  is  also  the  European  Economic  Area  Index  of  Consumer  Prices 
(EEAICP), HICPs for the EEA countries and interim HICPs for the Acceding and Candidate 
Countries (1). 

The MUICP and EICP are calculated by Eurostat using statistics provided by the Member 
States on price changes and the consumption patterns of consumers within their economic 

(1)   Euro-zone  countries:  Belgium,  Germany,  Greece,  Spain,  France,  Ireland,  Italy,  Luxembourg, 

Netherlands, Austria, Portugal, Finland.  
EU countries: The euro-zone plus Denmark, Sweden, United Kingdom. 
European Economic Area countries: The EU countries plus Iceland, Norway. 
Acceding  countries:  Czech  Republic,  Estonia,  Cyprus,  Latvia,  Lithuania,  Hungary,  Malta,  Poland, 
Slovenia, Slovak Republic. 
Candidate countries: Acceding countries plus Bulgaria, Romania and Turkey. 
(At March 2004). 

(cid:4) 

3

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
 
HICP 

A short guide for users 

territories.  As  explained  further  below,  the  aggregation  across  countries  uses  country 
weights for ‘household final monetary consumption expenditure’.  

The  HICPs  are  in  principle  open  to  revision,  in  particular  when  new  or  improved 
information becomes available.  

Flash estimates 

Eurostat also publishes each month a ‘flash estimate’ for the MUICP. This flash estimate is 
based on the results from the first countries to publish their national estimates and on energy 
price data. It gives an early indication of what the MUICP is likely to show when the full 
data set is available. 

2.  Conceptual basis and coverage of the HICPs 

The  HICPs  aim  to  cover  the  full  range  of  final  consumption  expenditure  for  all  types  of 
households in order to give a timely and relevant picture of inflation. 

Conceptually  the  HICPs  are  ‘Laspeyres-type  price  indices’  rather  than  ‘cost  of  living 
indices’,  this  reflecting their  key  role in measuring price stability. Thus the HICPs can be 
viewed  as  measuring,  broadly,  the  prices  of  a  fixed  expenditure  pattern  –  rather  than  as 
being  founded  on  economic  concepts  of  consumer  utility.  The  conceptual  differences 
between  the  two  types  of  price  indices  do  not  generally  lead  to  substantial  differences  of 
practice, but for more detailed information on this subject some references are given at the 
end of this guide.  

The coverage of the HICPs is defined in terms of ‘household final monetary consumption 
expenditure’,  by  reference  to  the  national  accounts  concepts  of  the  European  System  of 
Accounts (ESA 1995). 

Some  practical  consequences  of  the  use  of  ‘household  final  monetary  consumption 
expenditure’ are: 

•  The geographical and population coverage is of all purchases by households within the 
territory of a country, those by both resident and non-resident households (the so-called 
‘domestic concept’). 

• 

• 

The HICPs cover the prices paid for goods and services in monetary transactions. So for 
example some special fees and taxes paid to government for licenses will be excluded 
(when there is no equivalent good or service received in return). 

The prices measured are those actually faced by consumers, so for example they include 
sales taxes on products, such as Value Added Tax, and they reflect end-of-season sales 
prices. 

• 

The HICPs exclude interest and credit charges, regarding them as financing costs rather 
than consumption expenditure. 

(cid:4) 

4

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

Differences between the HICPs and national CPIs 

The differences between HICPs and individual national (CPIs) can sometimes be significant 
in  practice.  The  differences  have  in  general  been  diminishing,  although  national  CPIs  use 
their  own  national  methodologies.  In  many  countries  national  CPIs  were  set  up  to  serve 
different  purposes,  for  example  as  ‘cost  of  living  indices’  or  ‘compensation  indices’,  and 
some  of  the  underlying  concepts  and  methods  of  national  CPIs  are  inappropriate  for  the 
HICPs as a ‘pure’ inflation measure (of the impact of inflation on purchasing power).  

Some examples of differences between the HICPs and national CPIs are: 

•  The treatment of subsidised healthcare and education. The HICP includes the net price 
paid  by  consumers  (after  reimbursements),  while  some  national  CPIs  exclude  these 
purchases or record the gross price. 

•  The  treatment  of  owner-occupied  housing.  In  the  HICPs,  the  imputed  prices  for  the 
services  provided  by  owner-occupied  housing  are  currently  excluded.  However,  an 
index based on housing acquisition costs is being piloted for possible inclusion in future. 
It  will  be  compiled  separately  from  the  HICPs  on  an  experimental  basis  before  any 
decision  is  made  to  incorporate  it  within  the  HICPs.  National  CPIs  use  a  variety  of 
methods  –  for  example  some  use  an  approach  involving  imputed  rents,  some  include 
mortgage interest in their CPI, while others entirely exclude the shelter costs of owner-
occupiers. 

•  The  aggregation  formulae  used  at  the  most  detailed  level  of  stratification  in  the  index 
calculations  to  produce  the  so-called  elementary  aggregates.  The  HICPs  use  ratios  of 
arithmetic  mean  prices  or  of  geometric  means,  while  some  national  CPIs  use  other 
formulae. 

•  The geographical and population coverage. The HICPs cover all expenditures within the 
territory,  whether  by  residents  or  visitors,  while  some  national  CPIs  aim  to  cover 
expenditures by domestic residents both within and outside the country. 

3.  Accessing HICP data and metadata 

The HICPs are published each month to a strict, rapid, pre-announced schedule – in general 
between 17 and 19 days after the end of the month in question. The HICP flash estimates 
are generally released on the last working day of the month in question. 

Data 

The  HICP  data  which  is  released  each  month  covers  the  price  indices  themselves,  annual 
average price indices and rates of change, and monthly and annual rates of change. None of 
these are seasonally adjusted.  

As  well  as  the  all-items  HICPs,  a  range  of  around  100  indices  for  different  goods  and 
services are made available. The main headings are as follows: 

Food 
Alcohol and tobacco 
Clothing 
Housing 

(cid:4) 

5

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

Household equipment 
Health 
Transport 
Communications 
Recreation and culture 
Education 
Hotels and restaurants 
Miscellaneous 

In addition a series of special aggregates are released, including: 

The HICP excluding energy, 
The HICP excluding energy, food, alcohol and tobacco, 
The HICP excluding unprocessed food  
The HICP excluding energy and seasonal goods 
The HICP excluding tobacco 

The  weights  for  the  component  goods  and  services  and  the  individual  countries  are  also 
made available. 

All of the HICPs, complete list of component indices and special aggregates, are accessible 
via  the  Eurostat  website  (theme:  economy  and  finance)  and  the  ‘Euro-indicators’  website 
(statistical subject: consumer prices).  

The  ‘Euro-indicators’  site  gives  quick  access  to  the  latest  headline  figures  and  most 
important sub-indices. The Eurostat website also gives access to the monthly news releases 
and ‘Statistics in Focus –  Economy and Finance –  Theme 2’ (providing more detail).  

Metadata 

The Eurostat website also gives access to the ‘Compendium of HICP reference documents’, 
which contains the detailed reports on the HICP made in 1998 and 2000 by the Commission 
to the Council, the HICP Regulations and guidelines and some technical notes. 

4.  Basic points on the calculation of HICPs 

The  results  from  the  harmonisation  process,  in  terms  of  the  progress  made  on  a  range  of 
technical issues, are outlined later in this guide. By way of introduction, this section gives 
some brief information on how selected calculation issues are treated in the HICPs. 

Collection of price data 

Price collection in the Member States is typically carried out by a combination of visits to 
local  retailers  and  service  providers  and  central  collection  (via  mail,  telephone,  email  and 
the  internet).  More  recently,  the  first  use  of  retailers’  ‘scanner  data’  (the  data  recorded 
electronically when consumers pay for their purchases at check-outs) has been made for the 
HICP by one Member State. 

Quality adjustment 

The need for quality adjustment arises because the nature of the goods and services on the 
market changes over time. For example, it is not possible to simply compare the price of a 
particular car with a ‘similar’ one sold five years ago. In the mean time the quality of that 

(cid:4) 

6

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

car will have changed – the comparison of prices must take account of the quality change. 
The  price  statistician  must  therefore  make  a  quality  adjustment  –  that  is,  he  or  she  must 
estimate what part of the total price change between the two cars was really due to a change 
in the quality of the car and what part is a genuine price change.   

Quality adjustment is widely accepted by price index experts to be one of the most, if not 
the most, important and intractable problems in consumer price index construction. For the 
HICPs  there  are  minimum  standards  for  quality  adjustment  –  explicit  quality  adjustments 
must be made whenever possible and the whole of a price change should never be ascribed 
to  quality  differences  without  justification.  In  practice  all  of  the  Member  States  make 
adjustments for the changing quality of goods and services in their HICPs – using a range of 
direct  and  indirect  methods.  Nevertheless,  as  explained  below  under  ‘Future  steps  on 
harmonisation’,  some  further  specification  of  the  methods  of  allowing  for  quality  change 
will be necessary. 

The basket of goods and services and weighting 

In reality the distribution of purchases of goods and services, and the precise nature of some 
of the goods and services themselves, varies from country to country – there is no uniform 
basket applying to all countries. The HICPs reflect this reality by being based on the prices 
and  expenditures  which  are  representative  in  each  country  and  not  on  an  average  ‘euro-
basket’. 

The weights used for computing HICPs within a country may relate to a period up to seven 
years prior to the current year. However, to minimise any incomparability this might cause, 
adjustments  must  be  made  each  year  for  any  especially  large  changes  in  expenditure 
patterns. It is required that the HICPs should cover all newly significant goods and services. 
Special rules cover situations where prices are newly introduced for goods or services that 
were previously free, and other rules concern the situation when markets are opened to new 
suppliers – which may in practice deliver price benefits for consumers. 

Computation and aggregation 

In  order  to  produce  comparable  results,  each  country’s  HICPs  must  be  compiled  using 
specified formulae (the ratio of either arithmetic or geometric means, but not the arithmetic 
mean of price relatives). 

The MUICP is compiled as a weighted average of the countries comprising the euro-zone. 
The country weights are derived from national accounts data for ‘household final monetary 
consumption expenditure’. For the EU and EEA HICP aggregates, the euro-zone is treated 
as a single entity to which data for the other countries is then added (the weights again use 
national accounts data, converted into purchasing power standards). 

In  the  EU  as  a  whole,  well  over  one  million  price  observations  are  used  to  calculate  the 
HICPs each month. 

5. 

The HICPs – price stability and international comparisons 

Consumer  price  indices  have  a  variety  of  potential  uses  (for  example,  for  indexing  social 
benefits  or  contracts,  and  as  inputs  to  other  economic  analyses),  but  the  driver  for  this 
harmonisation project has been their use as the main measure for monitoring price stability 
in the euro-zone. The HICPs have been set up to provide the best measure for international 
comparisons of household inflation within the euro-zone and the EU. 

(cid:4) 

7

March 2004

 
 
 
 
 
HICP 

A short guide for users 

In  the  early  stages  of  the  HICP  project  the  most  important  use  of  the  HICPs  was  in  the 
assessment  of  the  price  stability  and  price  convergence  –  required  for  entry  into  the 
Economic  and  Monetary  Union.  More  recently,  the  focus  of  interest  has  shifted  towards 
country-group  aggregates  –  and  in  particular  to  the  MUICP.  This  change  of  emphasis 
reflects the European Central Bank’s objective of price stability and the view that the HICPs 
are  the  most  appropriate  price  measure  for  assessing  price  stability  (the  ECB  has  defined 
price stability as a year-on-year increase of below 2% in the MUICP, to be maintained over 
the medium-term). In 2003 the ECB re-affirmed its inflation target and added that ‘At the 
same time, the Governing Council agreed that in the pursuit of price stability it will aim to 
maintain inflation rates close to 2% over the medium term.’. 

The focus of the HICP on measuring price stability and convergence, and on international 
comparisons, does not mean that a wider range of users should not or can not use them for 
other purposes. Depending on the precise purpose the user has in mind, the HICPs may be 
the  best  available  price  statistics.  All  users  of  the  HICPs  should  note  however  that  the 
HICPs are revisable – the indices may change after the first results are published.  

6. 

The harmonisation process 

Legal basis 

The  first  milestone  in  the  development  of  HICPs,  in  October  1995,  was  the  adoption  of  a 
Council  Regulation  setting  the  legal  basis  for  establishing  a  harmonised  methodology  for 
compiling  comparable  CPIs,  as  required  by  the  convergence  criteria  in  the  Maastricht 
Treaty. 

Process 

The programme to develop a harmonised methodology has relied on the active participation 
of the EU national statistical offices’ prices experts, co-ordinated and led by Eurostat.   

The HICP Working Group has been the platform for developing the project. The Working 
Group,  attended  by  representatives  of  Eurostat,  the  Member  States,  European  Economic 
Area  and  Candidate  Countries,  has  also  benefited  from  the  participation  of  user 
representatives  –  from  the  European  Central  Bank,  national  central  banks  and  the 
Commission’s  Directorate-General  for  Economic  and  Financial  Affairs.  The  European 
Advisory  Committee  on  Statistical  Information  in  the  Economic  and  Social  Spheres 
(CEIES) was also involved in the early years. 

The opinion of the Statistical Programme Committee, the highest level EU Committee for 
statistical work, is sought for all HICP legislation. 

Minimum standards 

The  approach  taken  towards  harmonisation  was  firstly  to  adopt  the  framework  Council 
Regulation, setting out the broad principles and scope of the HICP. This has been built on 
over the years using a series of legally binding implementing regulations, each addressing 
one or more specific areas of methodology. The methods specified in these Regulations can 
usually  be  applied  with  some  flexibility,  since  comparability  is  required  only  with  a 
tolerance of 0.1 percentage points in either direction at the level of the overall indices. The 
aim has been comparability of results rather than the application of uniform methods in all 
circumstances. 

(cid:4) 

8

March 2004

 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

During  the  harmonisation  project,  the  Commission  has  provided  the  Member  States  with 
financial support to help them to resource the necessary work on their part. There has also 
been technical support given to Candidate Countries. 

7. 

Further technical issues for harmonisation 

Priorities for harmonisation 

At  the  outset  of  the  HICP  programme,  based  on  the  views  of  the  Member  States’  CPI 
experts, the following list of potentially important technical issues was drawn up. The table 
shows,  for  each  topic,  what  was  then  considered  to  be  the  likely  a  priori  importance  for 
international comparability. The list has been a guide for much of the harmonisation work 
undertaken since then. 

Issues concerning the comparability of HICPs 

Issue 

Quality adjustment 
Formula for elementary aggregates 
Age of item weights 
Missing observations / substitutions 
Basic index construction 
Editing / data preparation 
Inclusion / exclusion of item groups 
Price rebasing of weights 
Number of elementary aggregates 
Representative items vs. random sampling 
Regional differences 
Types of outlets 
Sampling error 
Discounts (when they do not vary over time) 

Long-term 
effects 
3 
2 
2 
2 
2 
1 
1 
1 
0 
0 
0 
0 
0 
0 

Key to the table: 3 = very likely, 2 = likely, 1 = possible, 0 = unlikely 

Short-term 
effects 
1 
1 
1 
1 
0 
1 
0 
0 
2 
2 
2 
2 
2 
0 

The  highest  priority  was  given  to  the  issues  thought  most  likely  to  be  of  longer-term 
importance,  and  a  wide  ranging  work  programme was developed. The main achievements 
so far can be seen from the progress reported below on HICP Regulations. 

8.  Regulations on the HICP 

This section outlines, in chronological order, the main subjects covered by the various legal 
Regulations implemented on the HICP since 1995. As such it identifies the main technical 
issues that have been addressed and so gives an idea of the progress made. Full references 
for each of the Regulations can be found in the annex to this guide. 

In 1995, a first Council Regulation set the legal basis for the establishment of a harmonised 
methodology for compiling CPIs in the Member States. It also gave some basic definitions 

(cid:4) 

9

March 2004

 
 
 
 
 
 
 
 
HICP 

A short guide for users 

to be applied, and set out the first standards on issues such as initial scope of the indices, the 
timetable  and  frequency  for  their  production  and  publication.  It  also  set  out  arrangements 
for funding the additional work in Member States that would be necessary. 

In 1996, a Commission Regulation set out a series of standards: 

• 

• 

• 

the  initial  coverage  of the indices – essentially all goods and services available on the 
domestic  market,  but  with  a  staged  introduction  for  certain  items  and  the  specific 
exclusion of a very few. 

the treatment of newly significant goods and services – all product types with a weight 
of at least one part per thousand should be covered. 

the formulae for the elementary aggregates – forbidding the use of arithmetic means of 
price relatives except where this can be shown not to affect comparability.  

•  minimum standards for quality adjustment – explicit quality adjustments must be made 
whenever possible and the whole of a price change should never be ascribed to quality 
differences without justification. 

•  sampling – the sample must be sufficiently representative of the products taking account 

of their price variability. The target sample must be maintained. 

•  missing  price  observations    –  carrying  forward  the  most  recent  observation  for  more 

than two months is not permitted. 

• 

the classification to be used (the then provisional version of the international COICOP 
classification)  and  the  level  of  sub-indices  to  be  calculated  (a  disaggregation  of  the 
COICOP groups). 

Regulations in 1996 and 1997 set down: 

•  arrangements for the transmission of HICP data to Eurostat. 

•  minimum  standards  for  the  quality  of  the  weights  of  the  HICPs  –  the  weights  should 
relate to a period not more than seven years before the index year. Checks should also 
be made each year to see whether any important changes have taken place and selective 
adjustments introduced when necessary. 

In 1998 three further Regulations: 

•  extended the coverage of products in the HICPs to include some goods and services that 
had until then been excluded (e.g. COICOP 06.2.1 ‘Medical Services’) and to extend the 
coverage of some other products that had only been partly included (e.g. COICOP 04.4 
‘Other services related to the dwelling’).  

•  specified  the  geographical  and  population  coverage.  The  HICPs  cover  purchases  by 
households  within  the  territory  of  a  country,  by  both  resident  and  non-resident 
consumers.  All  sections  of  the  population  are  covered  in  principle,  including  the 
extremes of the income distribution and including the institutional population. 

(cid:4) 

10

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

•  set  out  the  treatment  of  tariff  prices  (for  example  as  can  apply  for  electricity  or 

telephone charges), giving rules for dealing with changes in tariff structures. 

In 1999 Regulations covered: 

•  minimum  standards  for  the  treatment  of  insurance  transactions.  The  price  of  gross 
insurance  premiums  is  used  as  the  price  indicator,  but  weights  use  the  so-called 
‘insurance service charge’. 

•  a new classification framework to be used (the COICOP/HICP classification) – in line 

with the final version of COICOP defined by the United Nations.  

•  minimum  standards  for  the  recording  of  prices  in  the  health,  education  and  social 
protection fields. In particular the prices to be included in the HICPs are those paid by 
households net of any reimbursements from government, social security administrations 
or other non-profit institutions. 

In 2000 Regulations concerned: 

• 

rules on the timing of inclusion of purchaser prices for goods and services – prices for 
goods  should  be  included  in  the  HICP  when  they  are  observed,  whereas  prices  for 
services  should  be  entered  for  the  month  in  which  the  consumption  of  the  service  can 
commence. 

•  standards on the treatment of price reductions – setting out when the HICPs should take 

account of price reductions and other inducements to purchasers. 

In 2001 two further Regulations were published: 

•  minimum  standards  for  the  treatment  of  service  charges  proportional  to  transaction 
values  –  for  example  some  of  the  charges  that  can  be  paid  for  financial  and  legal 
services. 

•  minimum  standards  for  revisions  procedures  –  for  example  when  new  or  improved 
information is received or when there are changes to the rules governing the production 
of the HICPs. The HICPs are revisable – subject to some procedural rules. 

Guidelines: 
Beyond  this  extensive  series  of  Regulations,  a  series  of  guidelines  have  also  been  agreed 
concerning  revisions  practices  (now  converted into a Regulation); the treatment  of certain 
price  reductions;  price  observations  which  are  rejected  for  use  in  the  indices  and  the 
treatment of data processing equipment.  

9. 

Future steps on harmonisation 

The considerable progress made on the harmonisation of CPIs does not mean that this work 
is  now  at  an  end.  There  are  several  major  issues where further harmonisation will  still be 
necessary. 

(cid:4) 

11

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

The two major technical issues currently on the agenda are: 

•  quality  adjustment  and  sampling.  Eurostat  and  the  Member  States  are  actively 
following-up an Action Plan concerning this subject. The aim is to agree some more 
concrete best practices for a range of specific goods and services (in particular for 
and 
cars, 
telecommunications  services).  The  Regulation  which  addressed  this  issue  in  1996 
was only a first step – it is not in itself a sufficient guarantee of full comparability.  

consumer  durables,  books 

and  CDs, 

computers 

clothing, 

•  owner-occupied  housing.  The  imputed  prices  for  the  consumption  of  the  service 
provided by owner-occupied housing are currently excluded from the HICPs. Pilot 
calculations are being carried out using an approach based on the acquisition costs of 
housing  which  is  new  to  the  household  sector  (mainly  this  concerns  newly-
constructed  dwellings).  Indices  will  be  compiled  separately  from  the  HICPs  on  an 
experimental  basis  before  any  decision  is  made  to  incorporate  them  within  the 
HICPs. 

Beyond  these,  there  are  some  other  technical  issues  which  may  be  of  less  fundamental 
importance  for  the  HICPs  but  which  will  nevertheless  bear  on  comparability,  such  as  the 
treatment of seasonal items and the level of elementary aggregation. 

Some other essential tasks to be taken forward are: 

•  The  development  of  more  comprehensive  systems  to  assess  Member  States’ 
compliance with the existing Regulations and other guidance. More comprehensive 
quality assurance of the HICP compilation process in the widest sense is needed. 

•  The support of the national statistical offices of Acceding and Candidate Countries, 
to ensure that their HICPs are also comparable where this is not already the case. 

•  The  consolidation  of  the  now  very  extensive  legal  framework  for  HICPs,  and  the 
production  in  due  course  of  a  methodological  manual  to  assist  both  compilers  and 
users. 

(cid:4) 

12

March 2004

 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

Further information on HICPs 
For  a  more  detailed  report  of  the  harmonisation  process  see  the  two  reports  from  the 
European Commission to the Council on the harmonisation of consumer price indices in the 
European Union, COM(2000) 742 final and COM(1998) 104 final. For technical notes on 
the compilation of the MUICP and EICP see ‘On the Computation of Harmonized Indices 
of Consumer Prices – (HICPs)’, by the Eurostat Price Comparisons Unit, updated December 
2001. These documents form part of the ‘Compendium of HICP reference documents’. The 
Compendium also contains the HICP legal texts and guidelines. 

Statement  by  Mr.  Wim  Duisenberg,  President  of  the  ECB,  defining  the  link  between  the 
European Central Bank’s monetary policy strategy and the HICPs. ECB Press conference, 
Frankfurt 13.10.1998. 

ECB press release of 8 May 2003 concerning monetary policy strategy. 

For a discussion of CPI and Cost of Living Index concepts: 
‘Inflation,  the  Cost  of  Living  and  the  Domain  of  a  Consumer  Price  Index’,  by  Peter  Hill, 
paper submitted to the Joint UN ECE/ILO Meeting on Consumer Price Indices, Geneva 3-5 
November 1999. 

‘At what price? Conceptualising and Measuring Cost-of-Living and Price Indexes’, Charles 
L. Schultze and Christopher Mackie, Editors, US National Academy of Sciences, 2002. 

Contact points 
Alexandre Makaronidis 
Carsten Olsson 
Keith Hayes 
Lene Mejer 

Tel: (+352) 4301 33375 

HICP e-mail address: estat-hicp-methods@cec.eu.int 

HICP fax number: (+352) 4301 33989. 

Other useful links 
The Ottawa Group – international conferences on price indices 

The UN Economic Commission for Europe – international discussions on price indices 

The group working on the revision of the ILO manual on CPIs 

(cid:4) 

13

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

ANNEX 

A short guide for users 

Complete list of HICP Regulations (at March 2004) 

Council Regulation (EC) No 2494/95 of 23 October 1995 concerning harmonized indices of 
consumer prices (OJ L 257, 27.10.1995, p. 1) 

Commission  Regulation  (EC)  No  1749/96  of  9  September  1996  on  initial  implementing 
measures  for  Council  Regulation  (EC)  No  2494/95  concerning  harmonized  indices  of 
consumer prices (OJ L 229, 10.9.1996, p. 3) 

Commission  Regulation  (EC)  No  2214/96  of  20  November  1996  concerning  harmonized 
indices of consumer prices: transmission and dissemination of sub-indices of the HICP (OJ 
No L 296, 21.11.1996, p. 8)  

Commission Regulation (EC) No 2454/97 of 10 December 1997 laying down detailed rules 
for  the  implementation  of  Council  Regulation  (EC)  No  2494/95  as  regards  minimum 
standards for the quality of HICP weightings (OJ L 340, 11.12.1997, p. 24)  

Council  Regulation  (EC)  No  1687/98  of  20  July  1998  amending  Commission  Regulation 
(EC) No 1749/96 concerning the coverage of goods and services of the harmonised index of 
consumer prices (OJ L 214, 31.7.1998, p. 12)  

Council  Regulation  (EC)  No  1688/98  of  20  July  1998  amending  Commission  Regulation 
(EC)  No  1749/96  concerning  the  geographic  and  population  coverage  of  the  harmonised 
index of consumer prices (OJ L 214, 31.7.1998, p. 23)  

Commission Regulation (EC) No 2646/98 of 9 December 1998 laying down detailed rules 
for  the  implementation  of  Council  Regulation  (EC)  No  2494/95  as  regards  minimum 
standards  for  the  treatment  of  tariffs  in  the  Harmonized  Index  of  Consumer  Prices  (OJ  L 
335, 10.12.1998, p. 30)  

Commission Regulation (EC) No 1617/1999 of 23 July 1999 laying down detailed rules for 
the  implementation  of  Council  Regulation  (EC)  No  2494/95  -  as  regards  minimum 
standards for the treatment of insurance in the Harmonized Index of Consumer Prices and 
modifying Commission Regulation (EC) No 2214/96 (OJ L 192, 24.7.1999, p. 9) 

Commission Regulation (EC) No 1749/1999 of 23 July 1999 amending Regulation (EC) No 
2214/96,  concerning  the  sub-indices  of  the  harmonized  indices  of  consumer  prices  (OJ  L 
214, 13.8.1999, p. 1) 

Council Regulation (EC) No 2166/1999 of 8 October 1999 laying down detailed rules for 
the implementation of Regulation (EC) No 2494/95 as regards minimum standards for the 
treatment  of  products  in  the  health,  education  and  social  protection  sectors  in  the 
Harmonised Index of Consumer Prices (OJ L 266, 14.10.1999, p. 1) 

Commission  Regulation  (EC)  No  2601/2000  of  17  November  2000  laying  down  detailed 
rules for the implementation of Council Regulation (EC) No 2494/95 as regards the timing 
of  entering  purchaser  prices  into  the  Harmonised  Index  of  Consumer  Prices  (OJ  L  300, 
29.11.200, p. 14) 

(cid:4) 

14

March 2004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HICP 

A short guide for users 

Commission  Regulation  (EC)  No  2602/2000  of  17  November  2000  laying  down  detailed 
rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum 
standards for the treatment of price reductions in the Harmonised Index of Consumer Prices 
(OJ L 300, 29.11.2000, p.16) 

Commission  Regulation  (EC)  No  1920/2001  of  28  September  2001  laying  down  detailed 
rules for the implementation of Council Regulation (EC) N0 2494/95 as regards minimum 
standards  for  the  treatment  of  service  charges  proportional  to  transaction  values  in  the 
harmonised index of consumer prices and amending Commission (EC) No 2214/96. (OJ L 
261, 29.9.2001, p.46 – corrigenda published in OJ L 295, 13.11.2001, p. 34) 

Commission  Regulation  (EC)  No  1921/2001  of  28  September  2001  laying  down  detailed 
rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum 
standards  for  revisions  of  the  harmonized  index  of  consumer  prices  and  amending 
Regulation (EC) No 2602/2000 (OJ L 262, 29.9.2001, p.49 – corrigenda published in OJ L 
295, 13.11.2001, p. 34). 

All  these  legal  acts  can  be  found  at  official  legal  database  of  the  European  Union,  the 
‘Compendium of HICP reference documents’ also contains the texts of these Regulations. 

(cid:4) 

15

March 2004