Measurement of CPI in Thailand

Aditad Vasinonta

Thai Consumer Price Index (CPI) is collected, summarized and reported monthly by the Bureau of Trade and Economic Indices, Ministry of Commerce. The CPI in Thailand represents changes in the prices of 427 items of goods and services paid by consumers across Thailand. The current base year used for the comparison is 2007 (CPI in 2007=100).

Scope of Data

The weight of each goods and service is designed so that the CPI in Thailand reflects spending pattern for the majority of consumers which has characteristics as follows;

Residential Area:


Household Size:

Household Fixed Income:

Income Type:

Bangkok, Urban Area, Municipality Area

1-5 Persons

9,000 – 55,000 Baht (US$296 – 1,809)

Income-in-kind less than 39%

The current CPI market basket in Thailand is developed from detailed expenditure information taken from “Household Socio-Economic Survey” conducted by the National Statistical Office in 2007.

About 52,000 households in both municipal and non-municipal area in every province provided information on their spending habits in the survey.

Normally, the National Statistical Office and Ministry of Commerce conducts a survey and updates the CPI weight every 5 years.

Thai CPI in Thailand is constructed based on the Classification of Individual Consumption According to Purpose (COICOP) of United Nations. The goods and services (total of 417 items) in CPI calculation are weighed differently and arranged into 7 major groups. Major groups and examples of categories in each are as follows:

1. Food and Beverages - rice, flour, meat, duck, chicken, egg, vegetable, fruit, seasoning, and condiments, etc.

2. Apparel and Footwear - men's shirts, women's dresses, shoes, etc.

3. Housing and Furnishing - shelter, electricity charges, water supply charges, bedroom furniture, etc.

4. Medical and Personal Care - drugs and medical supplies, soap, shampoo, moisturizer, toilet paper, etc.

5. Transportation and Communication - vehicles, gasoline, vehicle insurance, communication equipment etc.

6. Recreation and Educational - toys, sports equipment, books, education admissions, etc.

7. Tobacco and Alcoholic Beverages - tobacco and smoking products, alcoholic beverage

Prince Information Collection

Item selection is based on judgmental basis depending on weight, feasibility to obtain prices periodically, the trend in consumption and popularity among consumers. The item specifications are reviewed every year due to the central survey, market information and collected reports.


Regarding to the geographical coverage, the price information is collected not only from Bangkok and its vicinity but also from the provincial areas. In the Northern, Northeastern and Southern regions, 8 provinces from each region are selected to represent the CPI while 14 provinces are selected to represent the central region. Price information collected from the urban area in these provinces and Bangkok are used to calculate the CPI which represents the CPI of the entire country.

The procedure used for price collection in the construction of CPI in Thailand is a sample survey. Each month, commercial, technical officers or price collectors who work for the Ministry of commerce check the price of the selected items to track and measure price changes. They visit retail stores, hospital, post office, service establishments, rental units, etc. to obtain the price information. The outlet selection is based on judgmental basis depending on sales volumes, location and voluntary of the owner. Some utilities and few prices are collected centrally or by telephone. The sample size of price quotation, monthly, is approximately 60,000 taken from 1,400 outlets. The frequency of sampling is varied depending on the item. Most item prices are collected monthly whereas prices of fresh food and gasoline are collected weekly and daily respectively.

In order to correctly track the price of goods and services over time (using Modified Laspeyres' Formula), the selected items must essentially be the same (quantity, type, size, quality, features, and brand) as in the earlier visit. The collected prices are actual cash prices including VAT and excise tax purchase by the consumer for the purpose of general consumption. The discount price (if any) is also included. When a price is temporarily unavailable (less than 3 months), the previous price is used forward. Few seasonal items are used and the last available price is carried forward for the month during the out season.

The recorded information is sent to the Provincial Commerce office and further submitted to the Bureau of Trade and Economic Indices in Bangkok. All collected information is checked for accuracy and consistency and makes any necessary corrections or adjustments. Large variation of prices will be taken into consideration, and the price collectors will have to explain any unusual fluctuation. As mention earlier, the Modified Laspeyres methodology is used for the basic index computation and aggregation. The weighted average of regional weights, Bangkok, and other 4 regions, are combined to the national CPI.

References:

(ESCAP), The United Nations Economic and Social Commission for Asia and the Pacific. May 25, 2000. http://www.unescap.org/ (accessed January 14, 2011).

Bureau of Labor Statistics, United States Department of Labor. Consumer Price Index. www. bls.gov/cpi/cpifaq.htm (accessed January 14, 2011).

Bureau of Trade and Economic Indices, Ministry of Commerce, Thailand (in Thai). http://www.price.moc.go.th/price/province/handbook/index.htm (accessed January 14, 2011).

Procedure for Preparation and Distribution of Trade and Economic Indices. Bangkok: Ministry of Commerce, 2010.

Division, United Nations Statistic. Classification of Individual Consumption According to Purpose. http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=5 (accessed January 2011, 2011).

Author Profile:

Aditad Vasinonta has been deeply interested in all sorts of mechanical systems ever since he could remember. He, therefore, made his academic choice into engineering. After completing a bachelor’s degree in mechanical engineering, he joined the Department of Industrial Promotion, Ministry of Industry, Thailand. At the early stage of his career, he worked as an engineer to promote metal-working and machinery industries. After working for two years, he was offered a scholarship, and he chose to further his engineering studies at the Carnegie Mellon University. Rejoining the Ministry of Industry after his Ph.D. graduation in 2002 was very exciting. Throughout the 8 years at this ministry, he has been working on several new initiatives such as industrial cluster development and business service development. In 2008, he was selected as the Outstanding Government Official and received an award from the Prime Minister of Thailand. 

Aside from his official work, Aditad has also served as the Secretary-General of the Asian Packaging Federation, an international organization comprising 14 Asian member countries, for 4 years during 2007 – 2010. In addition, he has taught courses in mechanical engineering at Thammasat University and King Mongkut's University of Technology North  Bangkok, Thailand.

Note:

This article has been published with permission of the author. His profile has been taken from official website of Lee Kuan Yew School of Public Policy where the author achieved a professional degree of Master in Public Management. 


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