<p>It's very likely that that these major categories in the hierarchy of goods in the market basket differ somewhat by country.  The sub-categories within these major groups are even more likely to differ across countries, as the market basket is supposed to reflect the purchases of a typical consumer, and typical purchases are obtained from consumption surveys of the population.</p>

<p>In the U.S., the eight major categories used for calculating the rate of inflation (Consumer Price Index) are:</p>

<ul>
<li>Food and Beverages</li>
<li>Housing (includes furnishings)</li>
<li>Apparel</li>
<li>Transportation</li>
<li>Medical</li>
<li>Recreation</li>
<li>Education and Communication</li>
<li>Other Goods and Services</li>
</ul>

<p>In Canada, the major groups are:</p>

<ul>
<li>Food and non-alcoholic beverages</li>
<li>Shelter</li>
<li>Household operations, furnishings and equipment</li>
<li>Clothing and footwear</li>
<li>Transportation</li>
<li>Health and personal care</li>
<li>Recreation, education and reading</li>
<li>Alcoholic beverages, tobacco products and recreational cannabis  </li>
</ul>

<p>Sources:</p>

<ul>
<li>U.S. CPI Handbook of Methods (<a href="https://www.bls.gov/opub/hom/pdf/cpihom.pdf" rel="nofollow noreferrer">https://www.bls.gov/opub/hom/pdf/cpihom.pdf</a>)</li>
<li>The Canadian Consumer Price Index Reference Paper (<a href="https://www150.statcan.gc.ca/n1/en/pub/62-553-x/62-553-x2019001-eng.pdf" rel="nofollow noreferrer">https://www150.statcan.gc.ca/n1/en/pub/62-553-x/62-553-x2019001-eng.pdf</a>)</li>
</ul>

CC BY-SA 4.0
2019-05-17T21:45:02.547Z
2019-05-17T21:45:02.547Z
AlexK
<p>The EU has a harmonized CPI methodology (<a href="https://www.ecb.europa.eu/stats/macroeconomic_and_sectoral/hicp/html/index.en.html" rel="nofollow noreferrer">HICP</a>). It has sometimes been applied (e.g. in OECD/G-20 contexts) to the US for comparison purposes. There's more to methodological harmonization than what goes in the basket (e.g. which areas are covered or the formulas used for aggregation).</p>

<p>There's also an attempt to standardized the basket in UN's <a href="https://unstats.un.org/unsd/class/revisions/coicop_revision.asp" rel="nofollow noreferrer">COICOP</a>; alas few countries use that as-is.</p>

<p>Some selected quotes from a <a href="http://www.oecd.org/sdd/prices-ppp/CPI-G20-methodology.pdf" rel="nofollow noreferrer">G-20 CPI paper</a>, which is quite detailed:</p>

<blockquote>
  <p>The preference for the use of the HICP, when available, rather than the national CPI is
  founded on the fact that Eurostat has developed a harmonised approach and a single set of definitions
  in order to arrive at comparable measures of inflation in the EU. Given the higher comparability of the 
  HICPs, the use of HICPs when available is considered appropriate for the compilation of the CPI G-20
  aggregate. The availability among G-20 economies is as follows:</p>
  
  <ul>
  <li>HICPs for the European Union covering all current 28 Member States: data from January
  1996 (including HICPs for France, Germany, Italy, and the United Kingdom);</li>
  <li>HICP for Turkey: data from January 1996;</li>
  <li>Experimental HICP for the United States that differs from the US National CPI in two major
  aspects. The US HICP (i) includes the rural population, and (ii) excludes owner occupied
  housing. However, for reasons of prominence, main uses and timeliness (the US HICP is
  published with a delay of one or two months with historical data starting in January 1998
  only) the use of the US national CPI is preferred in the calculation of the G-20 aggregate.</li>
  </ul>
</blockquote>

<p>Also</p>

<blockquote>
  <p>France, Germany, Italy, and Turkey publish both HICPs and national CPIs.
   The
  methodology used for the HICPs differs from the methodology used for the compilation of the
  national CPIs. [...] In general terms, the main methodological differences between the HICP and the national
  CPIs are as follows:
  1. Coverage: Excluded from HICPs are: Narcotics (COICOP / HICP 02.3); Imputed rentals for
  housing, including rentals of owner-occupiers (04.2); Games of chance (gambling) (09.4.3);
  FISIM (financial intermediation services indirectly measured) (12.5.2); and part of personal
  care services n.e.c. (12.1.3 ) (example: prostitution);
  2. Treatment of subsidized healthcare and education: the HICP includes the net price paid by
  consumers (after reimbursements);
  3. Formula used for elementary aggregates: the HICP use is ratios of arithmetic mean prices
  and/or ratios of geometric means;
  4. Geographical and population coverage: the HICP covers all expenditures on the territory of
  the country concerned, whether made by residents or non-residents (e.g. tourists).</p>
</blockquote>

<p>Regarding baskets in (other) G-20 countries:</p>

<blockquote>
  <p>The COICOP classification of consumer expenditures and prices on goods and services by
  purpose is only strictly applied by Korea and South Africa, while the COICOP/HICP classification
  (which is the COICOP classification adapted to the needs of the HICP) is used for the European Union
  and by Turkey. The other G-20 economies use national classifications which in some countries, such
  as Australia and Japan are consistent with COICOP at the highest level. Table 7 gives an overview of
  the systems of classification used and highlights the specific exclusions or inclusions by country. </p>
</blockquote>

<p><a href="https://i.sstatic.net/wK45m.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/wK45m.png" alt="enter image description here"></a></p>

<p><a href="https://i.sstatic.net/lhBUs.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/lhBUs.png" alt="enter image description here"></a></p>

<p><a href="https://i.sstatic.net/yDZCi.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/yDZCi.png" alt="enter image description here"></a></p>

<p>There is more to say about housing costs as well, in terms of methodological variation between countries, but I'm omitting that here; the paper covers it in detail too.</p>

<p>Also the CPI aggregation method may differ between countries:</p>

<blockquote>
  <p>The compilation of a CPI consists of two main stages: 1) the calculation of unweighted price
  indices (mostly price ratios) for elementary aggregates, and 2) the weighted aggregation of these
  elementary price indices for higher level aggregates. [...]</p>
  
  <p>Methods used for combining prices to give elementary
  aggregates vary widely among the individual countries of the G-20, the geometric mean (Jevons
  index) is the method most commonly used (10 countries plus France, Italy and the United Kingdom).
  All G-20 economies use a Laspeyres-type formula for their published CPIs [but there are some variations in details for that as well].</p>
</blockquote>

<p>There's also a table with those aggregation/index formulas per country, in the G-20 paper.</p>

CC BY-SA 4.0
2019-05-18T12:34:46.013Z
2019-05-18T12:46:17.763Z
2019-05-18T12:46:17.763Z
fantastic peace and prosperity
<p>The concept of a <a href="https://www.wikiwand.com/en/Market_basket" rel="nofollow noreferrer">market or consumer basket</a> is quite intuitive. I assume a market basket for a given country tells for which goods an average person spends how much of her money.</p>

<p>To be able to compare market baskets between different countries (and cultures) their (groups of) items must be chosen quite generically (such that they make sense everywhere in the world). The official German market basket as found <a href="https://www.wikiwand.com/de/Warenkorb" rel="nofollow noreferrer">here</a> includes the following groups of items:</p>

<blockquote>
  <p>01 Food and non-alcoholic beverages</p>
  
  <p>02 Tabacco and alcoholic beverages</p>
  
  <p>03 Clothing and shoes</p>
  
  <p>04 Housing and energy</p>
  
  <p>05 Furniture</p>
  
  <p>06 Health</p>
  
  <p>07 Transportation</p>
  
  <p>08 Telecommunication</p>
  
  <p>09 Leisure, culture</p>
  
  <p>10 Education</p>
  
  <p>11 Hotel, restaurants</p>
  
  <p>12 Other</p>
</blockquote>

<p>I wonder if this market basket makes sense everywhere in the world, or if there are significantly different ones around. Maybe there is an international standard? If so: Where can I find a good overview and comparison of this market basket all over the world?</p>

<microeconomics><econometrics><consumer-theory><consumption>
Market baskets: cross-border comparisons
Hans-Peter Stricker
# Market baskets: cross-border comparisons

(Asked by: username_0 on 2019-05-17)

The concept of a [market or consumer basket](https://www.wikiwand.com/en/Market_basket) is quite intuitive. I assume a market basket for a given country tells for which goods an average person spends how much of her money.

To be able to compare market baskets between different countries (and cultures) their (groups of) items must be chosen quite generically (such that they make sense everywhere in the world). The official German market basket as found [here](https://www.wikiwand.com/de/Warenkorb) includes the following groups of items:

> 01 Food and non-alcoholic beverages
>
> 02 Tabacco and alcoholic beverages
>
> 03 Clothing and shoes
>
> 04 Housing and energy
>
> 05 Furniture
>
> 06 Health
>
> 07 Transportation
>
> 08 Telecommunication
>
> 09 Leisure, culture
>
> 10 Education
>
> 11 Hotel, restaurants
>
> 12 Other

I wonder if this market basket makes sense everywhere in the world, or if there are significantly different ones around. Maybe there is an international standard? If so: Where can I find a good overview and comparison of this market basket all over the world?

**Tags:** microeconomics, econometrics, consumer-theory, consumption

---

## 2 answers

### Answer by username_1 on 2019-05-17. Score: 2 | Accepted answer

It's very likely that that these major categories in the hierarchy of goods in the market basket differ somewhat by country. The sub-categories within these major groups are even more likely to differ across countries, as the market basket is supposed to reflect the purchases of a typical consumer, and typical purchases are obtained from consumption surveys of the population.

In the U.S., the eight major categories used for calculating the rate of inflation (Consumer Price Index) are:

* Food and Beverages
* Housing (includes furnishings)
* Apparel
* Transportation
* Medical
* Recreation
* Education and Communication
* Other Goods and Services

In Canada, the major groups are:

* Food and non-alcoholic beverages
* Shelter
* Household operations, furnishings and equipment
* Clothing and footwear
* Transportation
* Health and personal care
* Recreation, education and reading
* Alcoholic beverages, tobacco products and recreational cannabis

Sources:

* U.S. CPI Handbook of Methods (<https://www.bls.gov/opub/hom/pdf/cpihom.pdf>)
* The Canadian Consumer Price Index Reference Paper (<https://www150.statcan.gc.ca/n1/en/pub/62-553-x/62-553-x2019001-eng.pdf>)


---

### Answer by username_2 on 2019-05-18. Score: 1

The EU has a harmonized CPI methodology ([HICP](https://www.ecb.europa.eu/stats/macroeconomic_and_sectoral/hicp/html/index.en.html)). It has sometimes been applied (e.g. in OECD/G-20 contexts) to the US for comparison purposes. There's more to methodological harmonization than what goes in the basket (e.g. which areas are covered or the formulas used for aggregation).

There's also an attempt to standardized the basket in UN's [COICOP](https://unstats.un.org/unsd/class/revisions/coicop_revision.asp); alas few countries use that as-is.

Some selected quotes from a [G-20 CPI paper](http://www.oecd.org/sdd/prices-ppp/CPI-G20-methodology.pdf), which is quite detailed:

> The preference for the use of the HICP, when available, rather than the national CPI is
> founded on the fact that Eurostat has developed a harmonised approach and a single set of definitions
> in order to arrive at comparable measures of inflation in the EU. Given the higher comparability of the
> HICPs, the use of HICPs when available is considered appropriate for the compilation of the CPI G-20
> aggregate. The availability among G-20 economies is as follows:
>
> * HICPs for the European Union covering all current 28 Member States: data from January
>   1996 (including HICPs for France, Germany, Italy, and the United Kingdom);
> * HICP for Turkey: data from January 1996;
> * Experimental HICP for the United States that differs from the US National CPI in two major
>   aspects. The US HICP (i) includes the rural population, and (ii) excludes owner occupied
>   housing. However, for reasons of prominence, main uses and timeliness (the US HICP is
>   published with a delay of one or two months with historical data starting in January 1998
>   only) the use of the US national CPI is preferred in the calculation of the G-20 aggregate.

Also

> France, Germany, Italy, and Turkey publish both HICPs and national CPIs.
> The
> methodology used for the HICPs differs from the methodology used for the compilation of the
> national CPIs. [...] In general terms, the main methodological differences between the HICP and the national
> CPIs are as follows:
> 1. Coverage: Excluded from HICPs are: Narcotics (COICOP / HICP 02.3); Imputed rentals for
> housing, including rentals of owner-occupiers (04.2); Games of chance (gambling) (09.4.3);
> FISIM (financial intermediation services indirectly measured) (12.5.2); and part of personal
> care services n.e.c. (12.1.3 ) (example: prostitution);
> 2. Treatment of subsidized healthcare and education: the HICP includes the net price paid by
> consumers (after reimbursements);
> 3. Formula used for elementary aggregates: the HICP use is ratios of arithmetic mean prices
> and/or ratios of geometric means;
> 4. Geographical and population coverage: the HICP covers all expenditures on the territory of
> the country concerned, whether made by residents or non-residents (e.g. tourists).

Regarding baskets in (other) G-20 countries:

> The COICOP classification of consumer expenditures and prices on goods and services by
> purpose is only strictly applied by Korea and South Africa, while the COICOP/HICP classification
> (which is the COICOP classification adapted to the needs of the HICP) is used for the European Union
> and by Turkey. The other G-20 economies use national classifications which in some countries, such
> as Australia and Japan are consistent with COICOP at the highest level. Table 7 gives an overview of
> the systems of classification used and highlights the specific exclusions or inclusions by country.

[![enter image description here](https://i.sstatic.net/wK45m.png)](https://i.sstatic.net/wK45m.png)

[![enter image description here](https://i.sstatic.net/lhBUs.png)](https://i.sstatic.net/lhBUs.png)

[![enter image description here](https://i.sstatic.net/yDZCi.png)](https://i.sstatic.net/yDZCi.png)

There is more to say about housing costs as well, in terms of methodological variation between countries, but I'm omitting that here; the paper covers it in detail too.

Also the CPI aggregation method may differ between countries:

> The compilation of a CPI consists of two main stages: 1) the calculation of unweighted price
> indices (mostly price ratios) for elementary aggregates, and 2) the weighted aggregation of these
> elementary price indices for higher level aggregates. [...]
>
> Methods used for combining prices to give elementary
> aggregates vary widely among the individual countries of the G-20, the geometric mean (Jevons
> index) is the method most commonly used (10 countries plus France, Italy and the United Kingdom).
> All G-20 economies use a Laspeyres-type formula for their published CPIs [but there are some variations in details for that as well].

There's also a table with those aggregation/index formulas per country, in the G-20 paper.


---

