EXPLANATIONS OF THE TABLES
A. VALUE ADDED TAX - VAT
1. In the price indices of inputs in the various industries – construction,
road construction, buses, hotels and agriculture – as well as the price
index of agricultural output, the prices measured do not include VAT.
2. For practical purposes, in order to calculate the price index regarding
indices of components that do not include VAT, but in principle have
VAT levied on them, they may be multiplied by the coefficients listed
in the table, in order to express the influence of VAT on them.
Period
July 1976-October 1977
November 1977-May 1982
June 1982
July 1982 – May 1985
June 1985
July 1985 – February 1990
March 1990 – December 1990
January 1991 – December 1992
January 1993 – 14 June 2002
15 June 2002 – February 2004
March 2004 – August 2005
September 2005 – June 2006
July 2006 – June 2009
July 2009 and after
B.
Coefficient for calculating input indices,
including the influence of VAT
1.08
1.12
1.1349
1.15
1.17
1.15
1.16
1.18
1.17
1.18
1.17
1.165
1.155
1.165
REDUCTION OF INDICES
In some years, price indices are presented in fewer figures. In order to compare these
indices with years in which the indices are displayed with complete figures, they must
first be multiplied by the appropriate multiplication coefficient. The following are the
multiplication coefficients for the indices and periods in which the reduction occurred.
Index
Index of Input Prices in Residential Building
Index of Input in Prices in Road Construction
Multiplication
coefficient
1
10
Price Indices of Input and Output in Agriculture
Index of Input Prices in Buses
1,000
100
Period
1985 to January
1996
1985-1986
1985-1993
C.
PERCENTAGES OF CHANGE – MONTHLY AND YEARLY –
METHOD OF CALCULATION IN THE INDEX TABLES
Percentage of Monthly Change
The percentage of monthly change expresses the change that occurs between the most
recent index published and the index of the previous month, in percentages. The
following formula is used to calculate the percentage of change:
(Most recent monthly index)
Percentage of monthly change = ----------------------------------- X 100 – 100
(Previous monthly index)
Percentage of Yearly Change
The percentage of yearly change expresses the change that occurs between the most
recent monthly index published, and the index of the same month in the previous year.
The method of calculation is similar to the one used for the percentage of monthly
change, and is based on the following formula:
(Most recent
monthly index)
Percentage of yearly change = -------------------------------------------------- X 100 – 100
(Index of same month in the previous year)
D.
AVERAGE PRICES
For a variety of materials, commodities and services, average prices are published.
These prices are based on the actual amount collected in every transaction, and are
obtained from a sample of reports, according to the type of index (shops, businesses,
establishments, etc.).
Average prices include taxes, discounts, and various duties and may or may not
include VAT, depending on the type of index (see Section A above).
In contrast to the indices, average prices do not include changes in terms of payment
and accompanying credit, and they reflect potential changes in the composition of the
reporting parties. For those reasons, average prices should not be used to calculate the
percentage of change from one period to another.
Average prices are intended only as an indicator of the amounts of prices during a
given period.
E.
AVERAGE ANNUAL INDEX
The average annual index of most indices and their components is calculated as the
arithmetic mean of 12 monthly indices.
F.
CALCULATION OF PERCENT CHANGE, CHAINING OF INDICES
AND LINKAGE
Main Uses of the Indices
The index is used for various types of linkage, adjustment of series values, and
analysis of price trends in a given industry or market, or in the general economy.
Detailed information on the goals and objectives of usage is provided in the
publications and appendices listed in the section on “Definitions of the Indices”. An
explanation of how to use the data is provided below.
1.
Calculating Percentages of Change
In order to calculate the change in an index from one month to another, it is necessary
to determine that those indices are presented according to the same base.
Percentage of change is calculated on the basis of the formula below:
(Index of the later month)
-------------------------------- X 100-100 = Percentage of change for the month or period
(Index of the earlier month)
For example, if it is necessary to calculate the percentage of change in the Consumer
Price Index from September 2000 to December 2000, the publications of the CBS will
indicate that those two indices are presented according to the same base:
(1)
(2)
The CPI for September 2000 was 106.1 points, based on the average
1998=100.0.
The CPI for December 2000 was 106.6 points, based on the average
1998=100.0.
Calculating the Percentage of Change:
106.6
------- X 100 – 100 = 0.47 percent
106.1
In order to calculate the monetary value linked to the CPI, it is not necessary to
calculate the percentage of change. Rather, the value can be calculated according to
the increase in the index from one month to another or from one period to another by
calculating the ratio of the indices:
The formula for calculating the factor of the rise in the index is as follows:
(Index of the later month)
----------------------------------- = The factor of the rise in the index
(Index of the earlier month)
Based on those measures, the result of the calculation will be:
106.6
------- =
1.0047
106.1
The linked monetary value of NIS 200 can also be calculated by directly multiplying
the ratio of the indices by their sum, as follows:
106.6
------- x NIS 200 = NIS 200.94
106.1
If the indices are not originally presented according to the same base, they should first
be chained, and then presented according to a uniform base. For a description of the
method of chaining indices, see the explanation below.
2.
Chaining Indices
Every few years, the Central Bureau of Statistics updates the index “baskets”, and
publishes the consumer price indices according to a new base that begins with 100
points.
In order to compare the periods for which different bases were calculated, it is first
necessary to chain the indices, and create a uniform base. In general, the series of
indices according to the new base is chained to the same series according to the old
base. The general formula for chaining is to multiply the indices that use the new base
by a chaining coefficient.
The chaining coefficient is the index of the new base period, which is computed
according to the old base divided by 100.
The following are several examples taken from various indices, which demonstrate
how indices from different periods are chained (the data were taken from tables in this
publication and in previous publications).
Example A: Chaining the Consumer Price Index – The General Index
Comparison of the December 2000 and the December 2002 indices, which were
originally calculated according to different bases:
(1)
The December 1998 index was 166.3 points, based on the average 1993 =
100.0.
(2)
The December 2000 index was 106.6 points, based on the average
1998=100.0.
The December 2000 index is chained and brought to the 1998 base.
The chaining coefficient is the old index of 1998, which was 158.1 points according
to the 1993 base, divided by 100.
Therefore, the chaining coefficient for this calculation is:
158.1
------- = 1.581
100.0
The December 2000 index chained to the 1993 base is: 106.6 x 1.581 = 168.5346
Now it is possible to calculate the percentages of change and linkage between the
December 1998 index and the chained December 2000 index.
In the Consumer Price Index – the general index – a series of chained indices has been
calculated for every year from September 1951, on a uniform basis. Based on these
indices, it is possible to calculate the percentages of change between every two
months, without having to calculate chained indices.
However, if we want to chain the indices of groups, sub-groups, and items for which
chained indices have not been calculated, it is necessary to carry out the chaining
procedures, as specified above, using the chaining coefficients that are appropriate for
the index that we wish to chain. The indices used to calculate the chaining coefficients
of groups, sub-groups, and items are listed in the previous publications for the
appropriate periods.