State of Israel
Media Release
info@cbs.gov.il
www.cbs.gov.il
Fax: 02-6521340
_____________________________________________________________________________________________________________________
Jerusalem
February 10, 2015
035/2015
Update for Weights of Goods and Services – Consumer Price Index
The largest categories of consumer items in the average consumption basket for a household are:
housing – 24.7%, transport and communications – 19.7%, food (including fruits and vegetables) –
16.7%
The weight of expenditures for housing declined to 24.7% (compared with 25.2% in the previous
consumption basket), but it is still the highest weight in the average consumption basket of households.
The weight of transport and communications also declined slightly, and amounted to 19.7% in the new
basket (compared with 20.6% in the previous basket). The weight of food items (including fruit and
vegetables) increased slightly, and amounted to 16.7% in the new basket (compared with 16.5% in the
previous basket). These results were obtained from summaries compiled by the Central Bureau of
Statistics in the process of updating the Consumer Price Index for 2015.
Notably, since January 1999, the weights of the index have been updated every two years in accordance
with the International Labour Organization regulations for compiling the consumer price index, which
recommend frequent updates of the index in order to minimize biases deriving from changes in the
consumption patterns of the population.
As of January 2015, the weights of the basket for the index are calculated on the basis of data from the
2012 and 2013 Household Expenditure Surveys (at 2014 prices). These will replace the previous weights,
which were calculated on the basis of data from the 2010 and 2011 Household Expenditure Surveys (at
2012 prices).
Weights of the Base Period of the Index
The prices of the consumption basket, which have been calculated according to an updated index as of
January 2015, represent the composition of consumption expenditures of households in 2012 and 2013.
Data on the composition of the consumption expenditures of families were obtained, as mentioned, from
the 2012-2013 Household Expenditure Surveys. The surveys were conducted in January-December 2012
Written by Libby Shapira and Aviel Krentzler – Higher Education and Science Sector
For explanations and clarifications, please contact the Press Relations Unit, at 02-652-7845
and January-December 2013 among 9,000 households each year, and represent the consumption
expenditures of about 2.3 million households in the population.
Based on the records of expenditures on different items submitted by the families participating in the
survey, the average monthly expenditure per family on various goods and services was calculated.
The transition from the composition of household expenditures obtained in the survey to "weights" of goods
and services in all of the groups as reflected in the index basket, was in two main stages:
1. In the first stage, the expenditures in the index were determined. In this stage, a few consumption
items were eliminated from the index basket obtained in the survey. The table below summarizes
the transition from general consumption expenditures compiled in the 2012 and 2013 Household
Expenditure Surveys to the total expenditures as reflected in the index basket.
Table A – Total Expenditures, and Consumption Expenditures in the Index
Type of Expenditure
Monthly expenditure per
household in 2012 and 2013, in NIS
17,304
Total expenditure
-2,918
Less: Direct taxes*
14,386
Total consumption expenditure
-276
Less: Expenditures not included in the index
(e.g., key money dwellings, expenditures on
gambling, and donations)
14,110
Total expenditures in the index basket
Total expenditures in 2014 prices
₪ 14,250
*Direct taxes: income tax, national insurance, and health insurance.
2. In the second stage, expenditures from the survey period (average 2012 and 2013) were adjusted to the
base period of the index (average 2014) in accordance with the changes in prices of the different
expenditure items between the two periods. The total expenditures included in the index basket after
adjustment to base period prices (i.e., to 2014 prices) amounted to NIS 14,250.
The following are data on the weights of the main consumption groups for the period January 2012December 2013, as well as on the updated index. For details on the weights by main consumption items,
see Table B.
Update for Weights of Goods and Services – Consumer Price Index 10/02/2015
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Table B: Weights on the Main Consumption Groups in the Index
Main group
Weights from January
2013
1000.0
Weights from January
2015
1000.0
Food (excl.) vegetables and fruit
136.30
138.54
Vegetables and fruit
29.16
28.50
Housing
252.20
247.46
Dwelling maintenance
96.67
98.57
37.39
36.14
Clothing and footwear
30.54
31.55
Health
52.22
56.53
116.76
120.34
206.22
196.84
42.54
45.53
Total
Furniture and household
equipment
Education, culture and
entertainment
Transport and communications
Miscellaneous goods and
services
Base Period of the Updated Index and Chaining With the Previous Index
The base period set for the updated index, as mentioned, was 2014 = 100.0 points. The updated index can
be linked to the previous index based on 2012 = 100.0 points, by multiplying the updated index by the
chaining coefficient. The chaining coefficient equals the average index for 2014 based on 2012, divided by
100.
Table C: Chaining Coefficient for the General Index and for the Index of Main Groups
General index
1.020
Food (excl. vegetables and fruit)
1.043
Vegetables and fruit
1.040
Housing
1.055
Dwelling maintenance
1.054
Furniture and household equipment
0.953
Clothing and footwear
0.976
Health
1.023
Education, culture and entertainment
1.004
Transport and communications
0.961
Miscellaneous goods and services
1.069
Update for Weights of Goods and Services – Consumer Price Index 10/02/2015
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For a breakdown by secondary consumption items, see Tables 1 and 2 (attached to this media release).
The Consumer Price Index in Quintiles of Households, by Disposable Income Per Standard Person
The data from the 2012 and 2013 household expenditure surveys were used as a basis for determining the
consumption basket for the index. In those surveys, the consumption expenditures of households were
calculated for partial population groups, in accordance with quintiles of disposable income per standard
person. Thus, the calculation relates to the expenditures of 20% of all households with the lowest income,
20% of all households with the highest income, and 20% of all households in the middle income quintile.
"Disposable income per standard person" was determined to reflect the household's standard of living
based on the following considerations:
Disposal income is the income that is available to the household, and that is the source of its consumption
expenditures.
Income per person: By considering income per person, the effect of household size is neutralized (the
"sources" of income available to each household member decrease as the household grows larger).
Income per standard person: Each additional person in the household increases consumption expenditures
by a steadily decreasing amount (when the household is larger, household size is an advantage).
The transition from the composition of household expenditures obtained in the survey to weights of goods
and services for the quintiles of each group was made in the same way as in the transition for the general
index.
The total expenditures included in the index after adjusting the expenditures to the base period prices (i.e.,
2014 prices), amounted to NIS 8,858 in the bottom quintile, NIS 13,573.5 in the middle quintile, and NIS
21,442.3 in the top quintile.
Table 3 (attached to this press release), displays the weights of the base period for the main groups and for
the groups in the various income quintiles. As the tables show, the groups differ substantially in their
consumption patterns. For example, expenditures for food amounted to 19.7% of the total consumption
expenditures in the bottom quintile, and dropped to 14.4% and 12.1% in the middle and top quintiles,
respectively. However, expenditures for "Transport and Communications" amounted to 13.8% of the total
consumption expenditures in the bottom quintile, and increased to 19.1% and 23.7% in the middle and top
quintiles, respectively.
Update for Weights of Goods and Services – Consumer Price Index 10/02/2015
4