The Department of Statistics maintains a consumers' price index based on 1952–53 consumption and assessed at 1955 prices. In constructing such an index it is necessary to determine as accurately as possible the standard “basket” of goods consumed by the group to which the index refers. The New Zealand index relates primarily to urban dwellers living as families, and is representative of about 85 per cent of personal expenditures. To do this the index takes account of the prices of 375 goods and services ranging from bananas to babies' napkins, and from petrol to peanut butter. The compilation of such a basket of goods and services and the assigning of correct weight or emphasis to the price of each commodity is a major operation. Sources of group and commodity weights were obtained from statistics of goods available for consumption, from the survey of nearly all retail establishments included in the 1953 Census of Distribution, and from a 1952–53 survey of household budgets conducted by the Public Service Association. From the beginning of 1966, a revised consumers' price index becomes effective. Its base is quantitative consumption patterns of 1962–63 costed at the average of prices ruling throughout the year 1965.

The index is maintained by the regular collection of prices of all the 375 commodities, and changes in these prices influence the level of the index in proportion to their initial 1955 weight. As well as revealing changes in the general retail price level, sub-indexes are compiled for the main New Zealand towns and for the major groups of household expenditure, e.g., food, housing, and apparel. The index for each group in 1955 is 1000 – this represents a separate starting point for each group and does not imply any equivalence between them. The percentages of base expenditure represented by each group are shown in the first row.

by John Victor Tuwhakahewa Baker, M.A., M.COM., D.P.A., Government Statistician, Wellington.