Shoppers browsing grocery aisles are essentially the foundation of the consumer price index (CPI). To calculate it, statisticians must know what the average consumer regularly buys — not only food, but also household goods, clothing, monthly bills and services such as haircuts or car repairs.

"Until now, we collected roughly 800 prices every month, covering both products and services. That's quite a large number because for each of those 800 items, prices were gathered from several regions and multiple stores," said Kaire Raasik, head of the economic and environmental statistics department at Statistics Estonia.

Where staff once had to visit stores to manually collect price data, the agency now receives information directly from checkout scanner data.

"Scanner data has three advantages. One is that it captures discounts targeted at specific customer groups. Another is that we get a very broad assortment. Previously, we collected about 800 prices in total, of which around 300 were food items. Now we can obtain the entire store assortment at once. That's a huge difference. We also get sales volumes, which we didn't have before," Raasik explained.

Marit Rebane, head of the applied economics program at Tallinn University of Technology, said using checkout data is a major step forward, making data collection more precise and expanding the sample size. "In the end, we can talk about an almost comprehensive sample, once all grocery stores, people and households across Estonia are covered. That significantly improves data quality," she said.

Sales volumes from checkout data is needed to determine the CPI's weights. To calculate them, household spending is grouped and its share of total consumption is calculated. In addition to quantities, prices are also crucial.

Food and non-alcoholic beverages account for the largest share — about one-fifth of the CPI. As a result, changes in food prices are often the main reason the index moves.

Housing costs, such as electricity bills and rent, follow closely behind. Transportation expenses, including fuel, are also significant. Leisure accounts for nearly 10 percent, covering various services and items such as vacation travel.

Other expenditures make up smaller shares of the CPI.

Statistics Estonia reviews the weights annually. This year's weights have not yet been published.

Another key methodological change concerns electricity prices, which were previously based on exchange prices. Before the 2022 energy crisis, exchange prices and fixed electricity package prices moved in tandem. However, when exchange prices surged to extreme levels, the CPI no longer accurately reflected consumers' actual electricity costs.

"It took time for us to fully understand the situation and gain access to new data. Now we have more precise data. Our model should now capture such extreme increases, including this January's price rise," Raasik said.

The CPI's publication was delayed this time because several updates coincided. In addition to the changes described above, the product classification system was revised and the agency worked to automate its processes.

"In the past, we relied heavily on Excel spreadsheets and their formulas. Now we're moving toward faster and more advanced data-processing programs," Raasik said. "We're constantly combining the old and new systems. Unfortunately, although everything worked during testing, at the last moment we noticed something was wrong in some smaller subcategories."

After ironing out the final kinks, Statistics Estonia published the CPI on Monday.

While opposition politicians have voiced doubts as to the agency's independence, neither Statistics Estonia staff nor people working with the agency feel that the CPI is subject to political or other outside pressure. National statistics are kept independent and transparent with the help of the Statistics Council, which brings together field experts and representatives of government agencies.

"There is certainly no expectation about what the statistics should look like or what they should show. The principle of independence applies here. The expectation has been that concerns are addressed, analysts are heard, dialogue is held and conclusions are reached — and that whatever decision is made is transparent, as good as possible and objective," said Raoul Lättemäe, a member of the Statistics Council from the Ministry of Finance.

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