THE NEW ZEALAND WARTIME PRICES INDEX (REPORT ON)

Appendix to the Journals of the House of Representatives, 1944 Session I, H-43

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1944 N E W ZEAL A N D

THE NEW ZEALAND WARTIME PRICES INDEX (REPORT ON)

Presented to both Houses of the General Assembly by Leave

CONTENTS PAGH 1. Summary of Events leading: up to the Adoption of the Wartime Prices Index .. .. ..1 2. Retail Prices Index Numbers and Cost of Living .. .. .. .. .. ..3 (as) Measurement of Price, Variations .. .. .. .. .. .. .. .. 8 (b) Measurement of Cost-of-living Changes . . .. .. . . .. .. .. 4 3. The Wartime Prtcks Index .. .. .. .. .. .. .. .. .. 5 Designation . . .. . . .. .. .. .. .. .. .. .. 5 Base Date .. .. . . . . . . .. .. .. .. .. .. 5 Publication of .. .. . . .. .. .. .. .. .. .. 5 Principles of Construction .. .. .. .. .. .. .. .. ..0 Seasonal Adjustment .. .. .. .. .. .. .. .. . . .. 8 Index Regimen .. . . .. .. .. .. .. .. .. .. 7 Group Weights .. . . .. . . .. .. .. .. .. .. 8 Sub-group Weights . . .. . . . . .. . . . . .. .. .. 9 Collection of Price Data .. .. .. .. .. .. .. .. .. 9 Geographical Coverage .. .. .. .. .. .. .. .. ..10 Detailed Survey of the Various Groups .. .. .. .. .. .. .. ..10 Food .. .. .. . . .. .. .. .. .. .. .. 10 Fuel and Light .. .. .. .. .. .. .. .. .. ..11 Rout .. .. .. .. .. .. .. .. .. .. -..11 Clothing, &d. .. .. .. .. .. .. .. .. .. .. 12 Miscellaneous . . .. . . .. .. .. .. .. .. .. 13 Wartime Prices Index Numbers to 15th June, 1944 .. .. .. .. .. ..14 Appendix A.— Regimen or the Wartime Prices Index .. .. .. .. .. .. 14 Appendix B,—List on . Group and Sub-group Weights .. .. .. .. .. .. 20 Appendix C—Percentage Distribution of Budget Expenditure : 1930 Budget Collection by Census and Statistics Department .. .. .. .. .. .. .. 21 Appendix D.—Percentage Distribution of Budget Expenditure : Standards of Living Survey, 1938-39 22 1. SUMMARY OP EVENTS LEADING UP TO THE ADOPTION OP THE WARTIME PRICES INDEX On 15th December, 1942, the Government announced its intention to stabilize the domestic economy of New Zealand by means of a comprehensive plan involving the stabilization of the prices of a wide range of essential commodities and services, of all rates of remuneration, and of rents and transport charges at the levels then ruling. Fundamental to the plan was the decision that wages and other forms of remuneration should be linked to the prices of essential commodities and services (including rents) entering into the cost of living of the average New Zealand family. This was to be achieved by the preparation of a special wartime prices index which would function as a reliable indicator of any variations in the retail prices of such commodities and services taken as a group. Increases or decreases in the general level of prices as measured by the index, when reaching certain stated percentages, would automatically lead to corresponding adjustments in rates of remuneration. The automatic adjustment of wage and salary rates to fluctuations in the prices of essential cost-of-living commodities as measured by a retail-prices index, whilst a well-established procedure in many countries, has not previously been adopted in New Zealand. The decision to prepare a special wartime index for this purpose is therefore of considerable interest. In its constructional aspects also the new index presents some features of interest, particularly in its inclusion of fresh fruit and vegetables and its adjustment of the price quotations for seasonal movements. These highly seasonable commodities are generally excluded from a retail-prices index on account of the difficulty of obtaining continuous and comparable price quotations.

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To facilitate a clear understanding of the precise part played by the wartime prices index in the Dominion's economy a brief summary of the events leading up to its adoption is now given. When the outbreak of war was imminent the Government took immediate steps to control prices* by issuing on Ist September, 1939, Price Stabilization Emergency Regulations stabilizing the prices of all commodities and the rates or fees for all services at the levels ruling on that date. The Price Investigation Tribunal was charged with the administration of the regulations. This was an emergency measure designed to absorb the initial impact of the war on prices, and was shortly superseded by a settled policy of wartime price-control which had as its objective the limiting of increases in prices of all commodities and services to the extent of actual increases in costs due to the war. This policy, however rigidly applied, could obviously act only as a brake on the general upward trend of prices which inevitably results from wartime circumstances. In particular, the increased landed cost of imports, on which New Zealand is peculiarly dependent, was soon reflected in the internal-price level, and by August, 1940, the Government Statistician's retail prices index recorded an increase of 4-7 per cent, over the figure for August, 1939. This fact contributed to pressure for higher wages to meet the increased cost of living. On 12th August, 1940, a general order of the Court of Arbitration was issued, granting a general 5-pcr-cent. increase in award wage-rates. The Government was concerned at the rising trend of costs and prices, and on 4th September, 1940, convened a widely representative conference, known as the Economic Stabilization Conference, which was required " To survey the general economic position of the country under war conditions in order to consider the possibility of stabilizing costs, prices, and wages, and to discuss expanding production so that the strain of war expenditure may be successfully borne and the standard of living be maintained as far as possible."")" After taking a considerable volume of evidence the Conference embodied its findings in a report containing a series of recommendations for the consideration of the Government. Of these, the most important was Recommendation No. 6, which, after pointing out that it was not possible to stabilize money wages unless essential commodities were available at prices fixed for the same period as money wages, went on to recommend that, in addition to wages, salaries, and rents, the prices of the following categories of essential commodities and services should be .stabilized : essential foodstuffs ; essential standard articles of clothing, footwear, and household necessities ; and public services, fuel and light."! The Government approved the principles of stabilization as set out in the report of the Conference, and on 22nd August, 1941, announced a list of 38 essential cost-of-living items, or groups of items, which were to be stabilized in price as from Ist September, 1941. The list included seventeen food items (some of which had already been stabilized in price as from the outbreak of war) ; Now-Zealand-made clothing and footwear ; and fuel, light, and tram fares. This first instalment of stabilization was, however, too narrow in range to form an adequate basis for the stabilization of wages and salaries, and on 25th September, 1941, an Economic Stabilization Committee was set up to advise the Government on matters relating to prices and incomes, and to formulate details of a plan for promoting the economic stability of the country. The need for such a plan was becoming increasingly apparent. The gap between the money-supply and the volume of goods available for civilian consumption was steadily increasing, rendering price-control difficult and giving an impetus to " black marketing." In addition, with narrowing profit margins the ability of firms to absorb cost increases was diminishing. In March, 1942, the retail index showed an increase of 8-3 per cent, over August, 1939. On 31 st March, 1942, the Court of Arbitration granted a further increase of 5 per cent., operative from 7th April, 1942, in respect of wages up to a stated amount. Meanwhile the Economic Stabilization Committee was planning a stabilization framework which would be both workable in detail and acceptable in principle by the various sections of the community. This was a complex and difficult task, but on 15th December, 1942, the Prime Minister was able to announce the Government's decision to implement a comprehensive plan of stabilization based on the recommendations of the Committee. The essential features of the plan§ were — (a) The list of stabilized commodities and services was increased from the original 38 items or groupsfto 110. The prices of the whole group of items taken together were to be kept stable at the levels ruling on 15th December, 1942. This did not imply the absolute prohibition of a price-increase in the case of any individual item, as it was conceivable that in some circumstances an increase might bo difficult to prevent. But if some items rose in price, then a compensating adjustment was to be made in the prices of other items to offset the increase. In this way the purchasing-power of the pound over essential cost-of-living commodities would be kept constant: (b) Wages, salaries, and all other forms of remuneration were to be stabilized at the rates ruling on 15th December, 1942. In the case of farm incomes the prices which the farmers received for all the main farm products would not be increased, the major items of farm costs to be correspondingly held. Internal farm prices were thus divorced from export parity : (c) Rents of all types of real property (other than those already covered by the Fair Rents Act, 1936, and its amendments) were to be stabilized as at Ist September, 1942, and rents payable as on that date were not to be increased : (d) Transport rates for goods and passenger services were to be stabilized at the general levels existing on 15th December, 1942, and the principal items of costs were to be similarly held : (c) Wages and salaries were to be linked to prices through the medium of a special wartime prices index, which was to be established for the purpose of recording changes in the general level of prices of essential cost-of-living commodities and services (including rents). In the event of a general order of the Court of Arbitration varying award rates, an adjustment was also to be made in the prices paid for farm products.

* For price-control generally, see H. L. Wise, Wartime Price Control in New Zealand, Wellington, n.d., and Problems of Price Control, Wellington, n.d. t Report of Economic Stabilization Conference, 1040, Government Printer, Wellington, 1940, p. 5. J Ibid., p. 10. § Broadcast by Prime Minister, 15th December, 1942. See also Wellington Evening Post and other newspapers, 16th December, 1942.

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The Economic Stabilization Emergency Regulations 1942,* were issued on 15th December, 1942, for the purpose of giving effect to the stabilization plan as announced. Part IV of the regulations sets out the procedure whereby rates of remuneration! are to be linked to movements in the prices of essential commodities, services, and rents, and requires the preparation of a wartime price index for the purpose of recording such movements. The relevant portion of the regulations is quoted below :— General Orders increasing or reducing Mates of Remuneration 40 (1) For the purposes of those regulations the Minister} shall cause to be prepared an index to be known as the wartime price index, for the purpose) of recording as from the 15th day of December, 1942, any increases or reductions in the prices of such commodities and services (including rents) as the Minister directs. (2) For the purposes of this Part of these regulations, the expression " the basic level of prices means the general level of the prices included in the wartime price index as indicated by that index as at the 15th day of December, 1942. 41. The Government Statistician shall as soon as possible after the end of the quarter ending on the J sth day ol March, 1943, and as soon as possible after the end of each succeeding quarter publish in the Gazette and in such other manner as he thinks fit a statement of the wartime price index as at the end of the quarter, showing in particular the amount of any increase or reduction in the general level of prices as indicated by the wartime price index. 42. A general order increasing or reducing rates of remuneration shall be made by the Court of Arbitration whenever there is an increase or reduction of not less than 5 per cent, in the general level of the prices included in the wartime price index, as shown in the last, statement published by the Government Statistician before the date of the application for the general order : Provided that the first general order increasing rates of remuneration to be made atter the commencement ot tneso regulations shall be made when there is an increase of not less than 2| per cent, in the basic level of prices. 43. (1) Subject to the provisions of this regulation, the amount of the increase or reduction provided for by auy such general order shall be as nearly as may be equivalent to the amount of the increase or reduction in the general level of prices as shown in the last statement published by the Government Statistician as aforesaid. (2) in making any such general order the Court shall exclude from the scope of the order such portion of the remuneration in each week of each worker affected by the order as exceeds £6 : Provided that the said amount of £0 may be reduced by such amount as the Court thinks fit in the case oi female workers, junior workers, and apprentices respectively. (3) Whore any such exclusion is made the increase or reduction provided lor by the order shall apply to tne uncxeluded portion of the remuneration of each worker, irrespective of his total earnings. (4) Where on the date on which any such general order takes effect the rate of the actual remuneration ot any worker exceeds the rate of the remuneration to which he is entitled under any award, industrial agreement, or apprenticeship order, the increase or reduction provided for by the order shall apply in accordance with this regulation as if he wore entitled under the award, industrial agreement, or apprenticeship order to his actual remuneration. Except with the consent of the Minister in Charge of Stabilization, no increase in price is permitted in respect of the commodities and services included in the wartime prices index. Traders may, oi course, make application to the Price Tribunal for an adjustment of price. The Tribunal then carries out its customary investigation of all the facts involved, and if satisfied that the application should not be granted, then a decision to that effect is convoyed to the applicant. If the Tribunal is not so satisfied, or if special reasons make it seem advisable to do so, then the application is referred through the Minister in Charge of Stabilization to the Economic Stabilization Commi.ssion§ for consideration. 2. RETAIL-PRICES INDEX NUMBERS AND COST OF LIVING Retail-prices index numbers as computed and published in many countries are commonly required to perform two functions : — (a) To measure variations in the retail price level; and (b) To indicate changes in the cost of living. Normally the retail index performs the first function with considerable accuracy, and also acts as a satisfactory indicator of general changes in the cost of living. In times of violent economic disturbance, and particularly in wartime, both the compilers and users of index numbers are, however, confronted with serious and difficult problems, both from 'the point of view of statistical technique and of interpretation of the results shown by such index numbers. In particular, certain factors emerge which render retail index numbers based on customary peacetime living standards inappropriate instruments for recording changes in the wartime cost of living. (a) MEASUREMENT OF PRICE VARIATIONS Retail-prices index numbers, although popularly referred to as " cost-of-living " index numbers, are in reality price index numbers only. They are a device for measuring changes in the average level of retail prices for a generalized purchaser, who may be taken to represent all sections of the community as in the case of the New Zealand retail index computed by the Government Statistician, or a particular section of the community as in the case of the British Ministry of Labour retail index, which relates specifically to the " working classes." Measurement of pure price-changes implies a fixed regimen and the application of fixed weights. Variable weights lead to an index number compounded partly of pure price-changes and partly of changes due to the altered weights. In addition, as the regimen or list of commodities on which the index is based is designed to measure price-changes only, the primary consideration is to obtain a representative sample of retail commodities and services for which comparable price quotations can be continuously obtained. The common practice is to base the regimen and apportion the base period weights on the results of a sample household budget collection. This ensures that the index measures changes in the prices of those kinds and qualities of goods and services commonly entering iuto the " cost of living " of the average household from which the budget sample is drawn.

* Statutory Regulations 1942, Serial number 1942/335. t " Remuneration," as defined by the regulations, means " salary or wages ; and includes time and piece wages and overtime and bonus and other special payments; and also includes allowances, fees, commission, and every other emolument, whether in one sum or several sums, and whether paid in money or not; and also includes travellingexpenses ; and also includes the remuneration of directors of companies, who for the purposes of this Part of these regulations shall be deemed to be employed by the companies of which they are directors." J The Minister of Industries and Commerce is the Minister in Charge of Stabilization. § Under the provisions of Regulation 5 of the Eoonomic Stabilization Emergency Regulations 1942 the Economic Stabilization Committee was reconstituted as a Commission.

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This is, however, a different thing from measuring changes in the prices of all those items which form a complete regimen for a standard of living, however defined ; and, in fact (except possibly in the case of a bare subsistence standard), it would obviously bo impossible to draw up a detailed and fixed " standard of living " regimen that would have any really widespread significance. A complete standard of living varies not only from place to place and over time, but also from person to person. The items included in an index regimen therefore only sample the various budget groups and represent something less than the aggregate budget expenditure. The essential requirements are that the items included should be properly representative and, in the aggregate, represent a large portion of the total budget expenditure. It is customarily assumed that the prices of the household goods and services outside the index regimen move in approximately the same direction and to the same relative extent as those within the regimen. (6) MEASUREMENT OF COST-OF-LIVING CHAN(3E,S Despite the fact that retail-prices index numbers are designed to measure price-changes purely and simply, they are widely used as indicators of changes in the average* cost of living and for the adjustment of wages and salary rates in conformity with such changes. In peacetime, when economic conditions pursue their normal course, the current retail indexes do afford a reliable guide to broad cost-of-living changes. This follows from the fact that they embody a wide range of essential cost-of-living commodities and services and that standards of living normally change slowly and often imperceptibly. Stability of regimen and weights is, however, essential to a prices index, which, as such, must exclude changes in the standard of living due both to variations in the quantity of particular goods bought and to substitutions of one commodity for another. It is the common experience of everyday life that such changes do occur, yet the process is normally a gradual one ; consequently retail indexes, although gradually becoming less efficient indicators of cost-of-living changes as the base date recedes in time, do serve satisfactorily for this purpose over relatively long periods. When the divergence between the standard of living represented by the base year regimen and weights and the current standard of living becomes noticeably wide it is usual to revise the index in such a way as to restore its approximate relationship to current living standards whilst doing least harm to its efficiency as an indicator of comparative price-changes over time, The position is very different in wartime. As opposed to the slow transition of living standards characteristic of normal times, wartime conditions bring in their train violent and far-reaching changes in the economic structure which are reflected in equally abrupt and widespread changes in customary standards of living. Many causes contribute towards such changes, but the following are of particular importance from the viewpoint of measuring variations in the cost of living : — («,) Price-changes. —Some commodities, particularly imported items, tend to rise rapidly in price whilst others which are domestically produced and therefore subject to a greater measure of control may be kept stable in price or rise to a lesser degree. This leads to economies and readjustments of expenditure by many householders, especially where wages and salaries do not keep pace with the rising price-level. (b) Heartily Conditions.— -Some commodities become in short supply, or may even disappear from the market. The principle of equal sacrifice leads to the institution of rationing systems for important commodities which are not in adequate supply. In general, wartime brings a definite curtailment in the consumption of many commodities and services. (o) Substitution.— Commodity shortages, rationing, and increased prices for various articles result in a search by the consumer for substitute commodities. (d) Quality-deterioration. —There is often a deterioration in quality, which implies a faster rate of consumption in that the consumer has to purchase more of a particular commodity over a given period than, before. (e) Income-changes. —Many sections of the community both earn and spend larger incomes in wartime than in peacetime. Whilst expenditure on essentials does not in general increase progressively with income, yet some change in relative expenditure as between the major cost-of-living expenditure groups can be anticipated from this cause. In so far also as income rises faster than the price-level, and goods are available, there will be a tendency in some directions for the standard of living to rise. Changes in taxation are also a relevant factor. Provided that the base period regimen and weights are kept constant and comparable price quotations can continue to be obtained, the mere fact of variations in the available quantities of particular commodities or of changes in the relative expenditure on them does not affect the index as a measure of pure price variations. Questions of substitution and quality present some difficulty, but even in these cases suitable statistical techniques can be developed to maintain the usefulness of the index as a measure of price variations. If, however, in the circumstances mentioned, the peacetime index continues to be used as an indicator of changes in the wartime cost of living, then misleading and illusory results are likely to be obtained. To do so is to ignore the changes in the quantities and kinds of goods and services actually available, and goods that are rationed or otherwise in short supply would consequently be overweighted in relation to current consumption. The average cost of living depends not only on the prices of goods and services, but also on the quantities actually available for household consumption. An index that is to have any validity as a measure of wartime cost of living must therefore take account not only of changes in the prices of consumers' goods and services, but also of alterations in the proportions in which they are available to the public. In short, to apply an index based on a peacetime regimen and with peacetime weights to wartime cost of living involves making the tacit assumption that the average household consumes the same goods and services, of the same quality, and in. the same proportions in wartime as in peacetime. This is clearly untrue, for modern " total " warfare brings about easily

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visible changes in living standards. No satisfactory statistic has yet been devised, however, which makes it possible to allow continuously for changes in the .standard of living ; consequently if an index measurement of wartime cost of living is desired two alternative courses may be pursued :— (as) Revision of the existing retail index in such a manner as to bring it into conformity with wartime consumption standards : (b) The preparation of a new index designed specifically to measure the prices of a regimen appropriate to wartime cost-of-living standards. After consideration of all the factors involved the New Zealand Government decided that alternative (b) would best meet the circumstances of the case. It should be noted here that this decision did not imply any criticism of the Government Statistician's retail index in respect of the purpose for which it was designed and expressly purports to fulfil (i.e., the measurement of changes in the general level of retail prices as indicated by the price-movements of the representative items which it includes). The Government Statistician has always emphasized* that his index cannot be properly designated a " cost-of-living" index, although normally it functions satisfactorily for this purpose. Certain developments, and in particular the impact of the war on living standards, resulted, however, in inadequacies in the retail index as a guide to cost-of-liring changes. The amount and methods of taxation had also altered considerably since the base regimen was adopted. There was, too, the fact that a number of the items in the retail index regimen could hardly be regarded as essential cost-of-living commodities as measured by the more stringent standards of wartime and as defined by the stabilization policy. These considerations were relevant to an accurate measurement of the cost of living, and led in particular to the following inadequacies in the retail index for this purpose : — (a) Commodity Weights. —The weights applied to the prices of individual commodities in the index regimen are based on average Dominion aggregate household consumption during the base period (1926-1930). Consumption habits have changed in the interim; for instance, there has occurred a marked shift from meat to vegetable consumption, and it is estimated that the aggregate consumption of electricity for domestic purposes is now thirty-five times as much as in 1930. Unrepresentativeness of weights was accelerated by the war, when many index commodities became continuously short in supply, leading in some cases to rationing (e.g., clothing, drapery, and certain foodstuffs). (b) Group and Sub-group Weights.- —The group and sub-group weights are based on a survey of household budgets carried out in 1930. Relative expenditure on the various groups has since changed in varying degree. (c) Substitutes.- Commodities have disappeared from the market, and in some cases consumers' demand has been diverted to alternative or substitute commodities. (d) Fresh Fruit and Vegetables. —These are not included in the regimen. Potatoes and onions are, however, included in the groceries group. (e) Rents. —Whilst weights were applied to the various sizes of houses (i.e., four, five, or six rooms) they were not applied to the various classes of houses (i.e., State, State reverted, and private). Consequently the inclusion of increasing numbers of State-built houses in the rent index of recent years had resulted in modern houses exercising a disproportionate effect on the index in relation to the actual number of such houses existing in the Dominion. (/) Geometric Mean. —For the clothing, drapery and footwear, and miscellaneous groups (excepting tram fares in the latter group) the computations were based on the uuweighted geometric mean of price relatives, due to the difficulties of obtaining consumption weights and to the continuous changes in fashions. This is an excellent method for computing the average ratio of change in prices which the index is designed to measure, but geometric means are- not suitable averages for measuring variations in the money cost of a fixed bill of goods from time to time, and it is precisely this feature that is of interest from the viewpoint of cost of living. With the above considerations in mind the Government, in Janua.ry, 1942, set up a committee (known as the Wartime Prices Index Committee) charged with the task of preparing a new wartime prices index based on the current volume and prices of goods actually available. The index so constructed was to function as an effective indicator of variations in the wartime cost of living, and thus furnish a measure of the accomplishment of the Government's policy of stabilization. 3. THE WARTIME PRICES INDEX DESIGNATION To avoid the technical objection to calling it a " cost-of-living " index, and to distinguish it from the Government Statistician's retail prices index, the new index is designated the " Wartime Prices Index." BASE DATE The base date is 15th December, 1942, as laid down by the Economic Stabilization Emergency Regulations 1942 (Part IV, Regulation 40). PUBLICATION The index number is made public quarterly by insertion in the N.Z. Gazette, as required by the above-mentioned regulations. It also appears in the Monthly Abstract of Statistics, compiled by the Census and Statistics Department and published by the Government Printer, Wellington. The " all-groups " index only is published, and not separate indexes for the various groups, although group movements are indicated where important.

* See section 011 Prices in N.Z. Official Year-Book.

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PRINCIPLES OF CONSTRUCTION The index is on a constant regimen with fixed weights, the only variable in the basic equation being the current-period prices. It is thus a prices index, but with regimen and weights representative of wartime consumption standards, thus enabling the index to function as an effective indicator of wartime cost-of-living changes. The " regimen " or list of commodities and services for which price-quotations are secured is divided into five representative expenditure groups ; some of these groups are again divided into more homogeneous sub-groups. The various groups and sub-groups are as follows : — Group. Sub-Group. 1. Food .. .. .. • • Groceries. Dairy-produce. Meat (including Fish). Fresh Fruit. Fresh Vegetables. 2. Rent. 3. Fuel and Light. 4. Clothing, Footwear, and Household Clothing and Footwear for — Drapery Man. Woman. Boy, 10| years. . Girl, 7 years. Child, under 5 years. Household Drapery. 5. Miscellaneous .. .. .. Fares. Crockery. Furniture. Household Cleaning. Ironmongery and Hardware. Papers, Periodicals, and School Stationery. Toilet and Personal Services. Postages and Telegrams. Tobacco. With the minor exceptions noted below, the sub-group indexes (and, in the case of fuel and light, the group index) are obtained by the aggregate expenditure method. Physical quantities (commodity weights) are applied directly to the prices of the individual items within the sub-group and the resulting products added, giving an aggregate money cost for the sub-group as a whole. This aggregate is then expressed as an index with the corresponding aggregate cost at the base date as base (=1000). Indexes for the Postages and Telegrams and Tobacco sub-groups within the Miscellaneous group arc obtained by the unweighted price relative method, a price relative being denned as the ratio of a commodity price in the current period to the price in the base period. The nature of the commodity weights differs for various groups, depending upon the availability of satisfactory consumption data or otherwise at the time of construction of the index. For instance, in the Food group, the Fuel and Light group, and the Household Cleaning and Toilet and Personal Services sub-groups of the Miscellaneous group, the weight applied to the price of each individual item represents the aggregate annual civil consumption of that item. This gives in effect the annual aggregate expenditure of the ivhole civil population on the respective items. In the case of the Clothing, Footwear, and Household Drapery* group, where consumption data were not available, the weights represent the estimated quantity of each article consumed by the individual in one year. The aggregate (price X weight) obtained for each item is thus actually on a "per capita" basis. On the otherhand, for the Crockery, Furniture, and Ironmongery and Hardware sub-groups of the Miscellaneous group the weights represent the estimated annual household consumption of the various articles. The aggregate (price X weight) is thus on a household basis. For the Fresh Vegetables sub-group of the F"ood group lack of consumption data led to the allocation of weights representing the estimated relative proportions in which the various vegetables are purchased. To obtain a composite group index the relevant sub-group indexes are multiplied by sub-group weights and the products added. The resulting aggregate is then expressed as an index with the corresponding aggregate at the base date as base ( = 1000). To arrive at a composite "all-groups" index the various group indexes are multiplied by group weights and the resulting products added. The aggregate for all groups so obtained is then expressed as an index with the corresponding aggregate at the base date as base (= 1000). SEASONAL ADJUSTMENT Retail-prices indexes commonly include a number of important cost-of-living commodities which are subject to definite price-fluctuations of a seasonal character, arising from the seasonal rhythm of production as influenced by climatic factors. Seasonal variations in demand also play some part in such fluctuations. Leading examples of commodities normally subject to seasonal price-movements are milk, eggs, meat, potatoes and other fresh vegetables, and fresh fruit. Seasonal price-movements do not, however, affect all such items at the same time or in the same direction ; for instance, during a period when fresh fruit and vegetables are showing a seasonal increase in price, eggs may show a seasonal decrease. In this way there is a tendency for such movements to cancel one another out, and, in addition, there is the inertia of the great majority of the regimen items which either do not fluctuate seasonally at all or only to a very slight extent. The net effect on the total cost of living may thus be minimized for any given period. Nevertheless the food-group index and to a lesser extent the " all-groups " index do normally reflect movements which are of a purely seasonal character and represent periodically recurring variations in the cost of living which are different in nature from true increases or decreases in such cost.

* Drapery is on a per household basis.

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The wartime prices index includes in the food group eleven important commodities which normally show marked seasonal fluctuations in price—namely, potatoes, onions, milk, eggs, meat, carrots, parsnips, swedes, cabbage, apples, and lemons. If price-quotations, unadjusted for seasonal variation, were to be used for these commodities in compiling the index, then the resulting " all-groups, "index number would require each time some measure of interpretation before it could bo used as evidence in applications for the variation of wages and salary rates. To avoid this element of uncertainty it was decided to eliminate as effectively as possible from the market quotations of the commodities listed such influences as are of a purely seasonal character. Consequently, before applying the commodity weight to the. average market price of each of these items, the latter price is adjusted for seasonal variation. The method adopted was to compute for each of the commodities named an index of seasonal variation for each month of the year, the index for December being equated to 100 in each case. The average market price is then adjusted for seasonal variation by dividing by the seasonal index for the appropriate month and multiplying the result by 100. It is customary to compute a seasonal index series on the basis of price data averaged over a period of years. This was done in the case of milk, the five-yearly period 1937-1941 being used. For the other commodities a different method had to bo employed. Wartime planning of production, the inevitable disturbance of normal consumption habits., price-control measures, and other factors arising out of the general fabric of wartime direction of production and consumption result in a more or less marked tendency to deviations from the peacetime seasonal rhythm of supply and demand. In such cases past seasonal experience is not a reliable guide, and the seasonal index series must therefore be based on existing production trends. The fact that the prices of the commodities concerned are stabilized at given levels "adds further weight to this view, particularly as in the case of seasonal commodities stabilization is defined as being the maintenance, quality for quality, of the seasonal price at a level not exceeding that ruling period by period for the twelve months ended 31st December, 1942. This meant that in general any deviations from the normal seasonal course of prices that had resulted by the end of 1942 were frozen into the price structure. It was also found when studying this problem that for some commodities (e.g., fresh fruit and certain fresh vegetables) price data for past years were either not available or not sufficiently complete to form the basis of a seasonal index series. With the above considerations in mind the Index Committee decided that in such cases it would be appropriate to compute an index series of seasonal variation on the basis of the retail prices as fixed month by month by Price Order during 1942. Where for any period during 1942 Price Orders were not in force, then the Price Order for the corresponding period of 1943 was substituted. Jn this way the seasonal index series were correlated with both the stabilized seasonal price-level for each month and with existing production trends. Once computed, the seasonal index series remain fixed. Seasonal index series for all the commodities listed above were computed on the basis of Price Orders with the exception of milk and lemons. Seasonal adjustment is not required for lemons, as marketing control methods result in the smoothing out at retail of purely seasonal fluctuations. INDEX REGIMEN In determining the regimen the Index Committee was guided throughout by the basic principle that the items included should be standard utility articles representing the reasonable requirements of average families with average incomes, although no precise statistical definition of the terms involved was attempted. Only such items were therefore included as could be regarded as coming within the scope of Recommendation No. 6 of the Economic Stabilization Conference* (i.e., essential foodstuffs, essential standard articles of clothing, footwear, and household necessities, public services, fuel and light, and rent). The index thus relates to the essential requirements entering into the cost of living of the average New Zealand household, and is not limited to what is commonly termed the " working-class "standard of living. In this connection it may be noted that in New Zealand social stratification does not show the wide cleavages common to older countries, industralization is limited, and the dispersion of incomes relatively small, these factors making for a more uniform standard of living than is possible incountries with more complex social and economic structures. The Committee did not have before it a survey of household budgets specially compiled for purposes of the index, but in selecting the items for inclusion close consideration was given to existing budget surveys for the most recent date available. These were :— (a) The household budget collection made in 1930 by the Census and Statistics Department, comprising 318 budgets, representing a wide geographical and occupational coverage. The broad occupational groupings are as underf :— Number of Budgets. Clerical 140 Farming .. .. •• •• •• ..16 Labourers .. • • • • • • ■ • .. 34 Salesmen and shop-assistants .. .. .. 27 Tradesmen .. . • • • • • ■ • .. 82 Other occupations .. ■• •■ ■• ..19 Total 318 (/)) The Standards of Living Survey of Tramway Workers and Boot and Shoe Operatives conducted in 1939 by the Social Science Research Bureau of the Department of Scientific and Industrial ResearohJ. This survey utilized 128 budgets from tramwaymen and 122 from boot and shoe operatives, a total of 250 budgets The average income for («) was £275 per annum, and for (b) .£3ll per annum for tramwaymen; and £260 per annum for boot and shoe operatives. Both series would be above the income class of the unskilled labourer. The Standards of Living Survey budgets are necessarily almost wholly representative of urban conditions. * Report, op. ait., p. 10. t N.Z. Official y'ear-Book, 1931, pp. 703-95. See also Appendix Cto this report. % Typescript (unpublished). See also Appendix Dto this report,

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Notice was also taken of the cost-of-Hving regimens of other countries. The regimen as finally determined comprises a total of 238 items, and, in addition, house rents. The distribution of the items over the various groups and sub-groups is as under : — Number Number Food Group — ofTtems. Miscellaneous Group — of items. Groceries (including potatoes and onions) 18 Knres .. .. .. ..2 Dairy-produce .. .. (i Crockery .. .. .. .. (> Meat (including fish) . . .. .. 22 Furniture . . .. . . 12 Fresh fruit .. .. .. .. 2 Household cleaning.. .. 7 Fresh vegetables .. .. .. 4 Ironmongery and hardware .. .. 37 Fuel and Light Group .. .. .. 4 Papers, periodicals, and school station - Clothing, Footwear, <&c, Group — ery .. .. .. .. 6 Clothing and footwear .. .. 96 Toilet and personal services .. .. 5 Household drapery .. .. 8 Postages and telegrams .. .. 2 Tobacco .. .. .. 1 Total items .. .. .. 238 In defining the number of items it should be noticed that in some instances two or more varieties of an important article are included in the regimen (e.g., woollen socks, worsted socks) ; these are counted as separate items. In other cases only one item appears in the regimen, but quotations are taken and averaged for two or more different varieties of the article (e.g., men's boots, tooth-paste, kettles) ; only one item is counted in such cases. In general an item has been counted whenever an individual weight is assigned. The complete regimen, together with quantity units and the weights assigned to individual items, is listed in Appendix A. GROUP WEIGHTS To ensure that each of the five representative expenditure groups into which the regimen is divided receives its correct relative importance in the calculation of the index it is necessary to determine the proportionate amount spent by the average household on each group in relation to the total expenditure on all groups combined at the base date. In other words, the group indexes must be weighted. Group weighting is rendered necessary by the fact that the regimen samples the various groups of item that it covers, and therefore does not include all the items of any given group which actually enter into the household budget. For example, whilst the Food group is widely representative of the essential foodstuffs bought by the average household, yet it is not feasible to include and measure the prices of all such items actually purchased. The application of appropriate group weights to the group indexes, based on relative expenditure on all items in the base period, means that the final " all-groups " index does take account of all the budget items, and not merely those that arc priced in the regimen. In assessing group weights the Index Committee was faced with the difficulty that no representative household budget collection of recent date was available. The weights were therefore decided upon after consideration of the proportion of expenditure on the several groups as indicated by — (a) The 1930 budget collection of the. Census and Statistics Department after adjustment for price-changes in the various groups between February, 1930, and February, 1942 ; and. (b) The Standards of Living Survey of Tramway Workers and Boot and Shoe Operatives, 1939, after adjustment for price-changes in the various groups between February, 1939, and February, 1942. Notice was also taken of the. relative group expenditure as adopted in the retail indexes of other countries.

The average of budgets (a) and (b) above was computed and adjusted to allow for rationing. With the adjusted average as a basis, the Committee, after taking into consideration other relevantfactors, adopted the group weights set out in oolumn (3) of the table below : — I"■\:t I L I A t

It will be noted that the group weights adopted bear a close relationship to the weights in columns (1) and (2), but embody slight adjustments which were introduced after all the relevant factors available to the Committee were considered. The weight for food (39) was, in the opinion of the Committee, in keeping with present-day actualities. For rent the weight assigned (25) is somewhat higher than that indicated in the other two columns, but in the view of the Committee 25 per cent, more truly represents the position at the present time. The fact that the group weights adopted total 100 per cent, does not imply that the regimen represents 100 per cent, of household expenditure, but merely that the proportion of expenditure actually covered (estimated at approximately 85 per cent.) is raised to a 100-per-cent. basis for convenience of calculation. Appendix B lists the group and also the sub-group weights, and makes a comparison with the Government Statistician's retail index.

8

(1) " (2) (3) A TESffirtL (IJ AVe^^SS d(6) «-P Weight adopted Rationing. Rationing. h ? the t*° m ™ttee. Food .. .. .. ' .. 39-0 40-6 39 Kent .. .. .. .. 23-2 24-1 25 Fuel and Light ...... 6-6 6-9 7 Clothing and Footwear, &c. .. .. 16-4 13-0 15 Miscellaneous .. .. .. M-8 15-4 14 100-0 100-0 100-0

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SUB-GROUP WEIGHTS The five major expenditure groups are in some oases divided into a number of sub-groups, representing a more homogeneous classification of expenditure within the group itself. The groups concerned arc Food, Clothing, &c, and Miscellaneous. On the same principle as mentioned in the case of the groups themselves it is necessary to allot sub-group weights representing the proportionate amount spent on each sub-group in relation to the total expenditure on the group as a whole at the base date. By then applying these weights to the respective sub-group indexes a composite index for the group as a whole can be obtained. Food. —The following sub-group weights were adopted for food : — Groceries .. .. .. .. .. 13 Dairy-produce . . .. .. . . 10 Meat 10 Fresh Fruit .. .. .. .. .. 8 Fresh Vegetables .. .. .. .. .. 3 Total. .. .. .. .. ..39 In arriving at these weights the, Index Committee had no specific current data on which to rely apart from such evidence as was afforded by budgets (a) and (b) mentioned earlier, after adjustment for price-changes. In addition, it was evident that the relative consumption of the several sub-groups varied greatly as between, households. The weights decided upon represent the considered opinion of the Committee after taking account of all the relevant factors. Clothing, Footwear, and Household Drapery. —The ratio of all clothing and footwear expenditure to household drapery expenditure was determined at 14 to 1. This ratio represents that shown by the 1939 Standards of Living Survey and is borne out by the results of an inquiry into the current experience of Wellington retail drapery stores. The ratio is furthermore consistent with that of 15 : 1 adopted in the Australian retail index (" C " series). The Committee arrived at the weights for the clothing and footwear sub-groups by estimating the relative expenditure on the basis of rationed consumption, taking into account the coupon value of each article and the number of persons in the various sub-groups. The sub-group weights adopted are as follows : — Men's Wear . . . . .. .. .. . . .. 3-4 Women's Wear . . . . .. .. .. .. 4*2 Boys' Wear (age 10J, representing ages 5-15) . . . . ... 2• 5 Girls' Wear (age 7, representing ages 5-15) .. .. .. 2-5 Child's Wear (age under 5) .. . . .. .. .. 1 • 4 Total, Clothing and Footwear .. .. .. ..14-0 Household Drapery .. .. .. .. .. l - 0 Total, Clothing, Footwear, and Household Drapery. . —— 15-0 Miscellaneous. —The following weights were determined upon for the Miscellaneous sub-groups on the basis of relative expenditure as shown by budgets (a) and (b) above mentioned, modified where necessary to take account of existing circumstances : — Fares .. .. .. .. 4-5 Includes trams, trains, and suburban buses. Crockery .. .. .. .. 0-5 In agreement with both budgets (a) and (b). Furniture .. .. .. .. 2-0 Under present conditions expenditure on furnishing is largely postponable, hence a relatively low weight has been allotted. Household Cleaning .. ... .. 1•5 In close agreement with both budgets (a) and (6). Ironmongery and Hardware .. .. 0-5 Slightly in excess of budgets (a) and (b). The length of life of present material is less than previously. Papers, Periodicals, and School Stationery 2-0 Less than budgets (a) and (6), in keeping with wartime availability. Toilet and Personal Services .. .. 1-0 Compromise between budgets (a) and (6). Postages and Telegrams .. .. 0-5 Allows also for toll calls. Tobacco .. .. .. .. 1-5 Compromise between budgets (a) and (b). COLLECTION OF PRICE DATA For the items in the following groups or sub-groups no special collection of price data is made, the Government Statistician's retail index collection being utilized : rent; groceries ; dairy-produce ; meat; fuel and light ; fares ; postages and telegrams ; tobacco. The same data are used also for some of the items in the following sub-groups : household cleaning ; toilet and personal services ; and papers, periodicals, and school stationery. The Government Statistician collects his retail index data largely through the agency of the local Inspectors of Factories attached to the Department of Labour, and does not employ field officers for the purpose. Details of the procedure are given later under the appropriate group headings. For all other items (excepting apples) the price data are collected by local officers of the Price Tribunal in the various centres covered, and forwarded periodically to the Price Tribunal's Head Office in Wellington. Here the returns are examined and checked and one copy then forwarded to the Government Statistician for compilation of the index, where it is subject to further examination. In the case of apples, price data are collected in the centres covered by local officers of the Internal Marketing Division, forwarded to the Division's Head Office in Wellington, and then after examination sent on to the Price Tribunal, where the same procedure as for other items is followed.

2—H. 43.

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GEOGRAPHICAL COVERAGE For items for which the Government Statistician's retail data are used the geographical coverage is mainly for twenty-five centres of population. Data collected by the Price Tribunal and the Internal Marketing Division cover the four main centres of population only (i.e., Auckland, Wellington, Christchurch, and Dunedin). Price quotations are collected from twenty-five centres for the following : groceries, dairy-produce, meat and fish, and rent. For all other items the coverage is the four main centres only. The twenty-five centres covered have a total population of 856,000, being approximately half the total population of the Dominion, and are distributed over botli the North and South Islands. They are representative of both coastal and inland districts, and of both large and small centres. The four main centres, with a total population of 602,000, represent nearly 40 per cent, of the Dominion's population and over 70 per cent, of the population of the twenty-five centres mentioned. The following are the centres referred to, with the population given to the nearest thousand as estimated on Ist April, 1941, by the Census and Statistics Department:— Centre. Population. Centre Population. Auckland .. •... .. 224,000 Wanganui .. .. .. 26,000 Wellington .. .. ..160,000 Taihape .. .. .. 2,000 Christchurch .. .. .. 136,000 Palmerston North .. .. 26,000 Dunedin .. .. .. 82,000 Masterton .. .. .. 9,000 Whangarei .. .. .. 8,000 Blenheim .. .. .. 5,000 Hamilton .. .. .. 21,000 • Nelson .. .. .. 14,000 Waihi .. .. .. 4,000 Greymouth .. .. .. 8,000 Rotorua .. .. .. 7,000 Ashburton .. .. .. 7,000 Gisborne .. .. .. 16,000 Timaru .. .. .. 19,000 Napier .. .. .. 19,000 Oamaru .. .. .. 8,000 Dannevirke .. .. .. 4,000 Alexandra .. .. .-. 1,000 New Plymouth .. .. 19,000 Gore .. .. .. 5,000 Invercargill .. .. .. 26,000 Total .. .. 856,000 DETAILED SURVEY OF THE VARIOUS GROUPS A detailed survey of the various groups is now given. Food Group This group comprises 52 articles of food, and is widely representative of the essential foodstuffs purchased by the average household. Commodity Weights. —The commodity weight applied to the price of each article of foodstuff in the food group represents the aggregate annual civil consumption of that article, based on the most recent statistics available. In the case of fresh vegetables (carrots, parsnips, swedes, and cabbage) this method could not be used owing to the lack of satisfactory consumption data, and the commodity weights allotted to these items represent the relative proportions in which, in the opinion of the Committee, the respective vegetables are purchased. The commodity weights were in general derived according to the formula : Consumption = Production + Imports — Exports — Amount used in manufacture — Estimated requirements of military forces, and were in most cases based on statistics of trade and production for the years 1940-41. For rationed commodities the estimated rationed consumption was taken. In the case of meat the commodity weights were allotted on the basis : Total slaughterings of stock — Exports — Amount killed on farms — Estimated requirements of military forces, and with allowance for stocks of meat awaiting shipment. Groceries, Dairy-produce, Meat. —For these sub-groups no special collection of price data is made, the Government Statistician's retail index collection being utilized. This collection covers price quotations from 90 grocers and 63 butchers for twenty-five centres of population as at the 15th of each month, the number of quotations secured from each centre being roughly proportional to the size of the centre. Both chain and independent shops are covered, and were originally selected in such a manner as to ensure a representative sampling for the whole of each centre. Food-prices are collected each month through the agency of the local Inspectors of Factories of the Department of Labour. For milk and bread the local Inspector personally ascertains the price and submits a return thereof to the Government Statistician on a prescribed form. For the other commodities the retailers complete each month questionnaire forms supplied by the Government Statistician, which are then collected by the Inspectors of Factories and forwarded to the Census and Statistics Department. The questionnaire forms give a description of the various commodities for the guidance of retailers, but in practice the grades selected for pricing are not necessarily identical in all centres. The grade priced is that of which the largest quantity is normally sold (i.e., the predominant or modal grade) and is adhered to for all future quotations. The price data for each of the sub-groups are combined into sub-group indexes as follows : an average price of each article is computed for each centre and multiplied by the population of the centre. The products are added and divided by the total population of the twenty-five centres, giving an average price for each article for the Dominion. The Dominion average price of each article is then weighted by the annual aggregate civil consumption of the article and the products added. The resulting aggregate cost for the sub-group is then expressed as an index with the corresponding aggregate cost at the base date as base (= 1000). Fresh Fruit. —Fresh fruit is represented in the index by apples and lemons. Lemons : New-Zealaiid-grown lemons only are taken into the index ; imported lemons, which form only a small proportion of the total supply, being excluded. Quotations are collected for the four main centres by district officers of the Price Tribunal, prices being sampled twice within the week nearest to the 15th of the month for which the return is made, and then averaged.

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Prior to the introduction of sale by weight, lemons were quoted for on a " per dozen " basis, but quotations are now " per pound." Apples : Quotations are collected for the four main centres by district officers of the Internal Marketing Division. Prices are sampled at intervals over a period of two weeks nearest to the 15th of the month for which the return is made, and then averaged. It is not practicable to measure the price of all varieties and kinds of apples sold. Those varieties in predominant supply, of the most popular grade and size, were therefore determined for each month of the year as a basis for the collection of price-quotations. An average price for each selected variety is computed for each centre. These are added and divided by 4, giving an average price for each variety for all four centres combined. An average price for all varieties combined is then derived by applying fixed weights representing the quantities of each variety marketed in the Dominion during the corresponding month of 1942. To obtain the sub-group index for fresh fruit, aggregate civil consumption weights are applied as for the other food sub-groups. The weight for lemons makes allowance for other citrus fruit, and the weight for apples makes allowance for pears. Fresh Vegetables. —The Fresh Vegetables sub-group comprises carrots, parsnips, swedes, and cabbage. (Potatoes and onions are included in the Groceries sub-group.) The inclusion of fresh vegetables in a retail index is commonly avoided owing to the well-known diliiculties of obtaining continuous and comparable price-quotations. The Index Committee considered that the reasons for excluding fresh vegetables from the Wartime Prices Index were outweighed by the need for providing for some price-measurement of such an important clement in the cost of living, and took steps to meet these difficulties : — (a) By selecting vegetables generally available throughout the year : (b) By recommending that the selected vegetables should be sold at retail by weight so that comparable price statistics could be obtained. This recommendation was adopted and all four vegetables are sold by weight. The question of early varieties of vegetable gave rise to certain difficulties. It is, however, the policy of the Government that in wartime, in circumstances where adequate supplies of main crop or alternative vegetables are available, the production and consumption of " out-of-season " varieties should be discouraged and regarded in the light of luxury items. In accord with this policy the Tndex Committee decided that where for any period adequate main crop supplies are normally available, and early varieties form only a small proportion of the total available supply, then the latter varieties should lie excluded from measurement in the index as being of the nature of luxuries. Where, however, early varieties normally form for any period of the year an appreciable proportion of the available supply of the vegetable, then they are included in the index, the price-quotations for main crop and early varieties being weighted according to their estimated consumptive importance for the period. Price-quotations for fresh vegetables are collected for the four main centres by local officers of the Price Tribunal. Prices are sampled twice within the week nearest to the 15th of the month for which the return is made. Every sample at each centre covers three urban and two suburban shops. An average price of each vegetable is computed for each centre. These are then added and divided by 4, giving an. average price for each vegetable for all four centres combined. To obtain the sub-group index the appropriate commodity weights are applied to the average prices as for other sub-groups. As noted above, the commodity weights for fresh vegetables represent not aggregate civil consumption, but the proportions in which, in the opinion of the Index Committee, the respective vegetables are purchased. These are : carrots, 3 ; parsnips, 1 ; swedes, 1 ; cabbage, 3 : total, 8. The weight for cabbage makes allowance also for silver beet. The principal differences between the food regimens of the Wartime Prices Index and the Government Statistician's retail index are as under :— Groceries. —The wartime prices index excluded tinned fish and certain lines of tinned and dried fruits on the grounds of non-availability. It also excluded sago, tapioca, cocoa, treacle, and pepper, but introduced rolled oats and baking-powder. Dairy-produce and Meat. —Eegimens identical. Fresh Fruit and Vegetables. —The addition of this new group to the Wartime Prices Index represents the most important difference between the two food regimens. Fuel and Light Gboup This group is represented by coal, coke, gas, and electricity. Candles and kerosene were omitted as being unimportant elements in the modern household budget. Firewood was also omitted owing to the difficulty of securing really significant and comparable price statistics. The Government Statistician's retail-price data are used, quotations being obtained for the four main centres at the 15th of the month by the local Inspectors of Factories. Goal. —Coal-dealers quote for those types of household and kitchen coal most frequently sold in their locality. The quotations thus refer to coal of various kinds, but all quotations are in respect of coal used for domestic purposes. Gas. —Quotations are given by gas undertakings for the net cost of 1,000 cubic feet of gas used for domestic heating, cooking, and lighting. Electricity. —Quotations are given by municipal electricity authorities for the net cost of 23 units of electricity per month used for domestic heating, cooking, and lighting (heating and cooking, 16 units ; lighting, 7 units). Coke. —Quotations are given by coal-dealers for household coke. ; ■ To derive the group index an average price for each item is computed for each centre. These are added and divided by 4, giving an average price for each item, for all four centres combined. The appropriate aggregate civil consumption weights are then applied to the average prices. Rent Group No special collection of rent data is made for the Wartime Prices Index, the Government Statistician's semi-annual collection made in February and August of each year being utilized. The general level of rents moves sluggishly, and it lias not been deemed necessary to collect data at more frequent intervals. The rent questionnaires cover twenty-five centres of jropulation, the number of returns for

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each centre being roughly proportional to the size of the centre. Nearly one thousand separate returns are received, mainly from house-agents, but also from private owners and other convenient sources. The returns, covering 28,500 dwellings (10,300 State Advances rerrtal, 3,800 State Advances reverted, and 14,400 private) show the weekly rentals payable for unfurnished houses at the 15th of the month for which the return is made. Rents of four-, five-, and six-roomed houses are covered for each of the three classes of house mentioned above. To arrive at the rent index an average rental for each, centre is computed for each size of house (i.e., four-, five-, and six-roomed) within each class (i.e., State, State reverted, and. private). This gives, in effect, nine average rentals for a centre. These arc combined into nine corresponding Dominion averages by applying population weights. The Dominion averages are then combined into a Dominion average rental for all sizes and classes of house by applying appropriate weights representing the total numbers of each size and class of house in the Dominion. The Dominion average rental is then expressed as a relative of a similar base average (= 1000) to give the group index. The Government Statistician's index did not utilize weights for the classes of house covered, although weights were allotted for the various sizes. It was, however, apparent that the inclusion of increasing numbers of modern State-built houses in the collection had resulted in modern houses having a greater proportionate representation in the rent index than they were entitled to on the basis of the number of such houses existing throughout the Dominion. The Index Committee therefore decided to adopt class weights based on the total number of houses'of each class existing in the Dominion. It should be noted that the dwellings covered by the rent-collection may or may not be ingood repair or of modern construction, and the rent index relates not to rents demanded of new tenants, but to the rents currently being paid by tenants of the whole of the dwellings covered by the collection. It was not considered practicable to include the rent of flats, for the following reasons :— (i) In view of the ease of converting houses into flats, and vice versa, the number of flats in any area may fluctuate violently from period to period : (ii) Only house-agents' flats could be covered (i.e., the dearer flats). It would be impossible to keep track of the larger number of cheaper Hats which do not pass through houseagents' hands: (iii) Absence of an acceptable basis of comparison between one flat and another. Clothing, Footwear, anb Household Drapmbv Group This group comprises 96 articles of clothing and footwear and 8 articles of household drapery, and is divided into six sub-groups, representing men's wear ; women's wear ; boys' wear (age 10J) ; girls' wear (age 7) ; child's wear (age under 5) ; and household drapery. The items comprising this group represent, in the opinion of the Index Committee, the essential requirements of the average man, woman, boy, girl, and young child, after taking into consideration the factor of wartime availability. For household drapery the items included are considered to represent essential requirements for an average household after taking account of the same factor. Wartime availability also led to a greater emphasis on the selection of woollen goods as against cotton goods than might normally have been accepted as appropriate, the reason being that the raw material for woollen goods is domestically produced while similar material for cotton goods requires to be imported. Therewas also the further consideration that price-control, of the finished article is greatly facilitated where the raw material is produced and processed within the country. Care was taken to select wherever possible, in collaboration with expert officers of the Price Tribunal, well-defined lines of a good standard utility type and quality, thus enabling strictly comparable pricequotations to be obtained for all centres at each price-collection. This procedure marked a departure from that adopted for the Government Statistician's retail index, whereby individual shopkeepers quoted and adhered to the prices of those articles in predominant demand within defined categories, there being no necessary uniformity as between individual shopkeepers. The Wartime Prices Index includes a wider range of apparel articles than the retail index, and the kinds and qualities of the articles also differ to some extent. The commodity weights applied to the price of each item within each sub-group represent, the Index Committee's estimate of the quantity of each article consumed by the individual in one year, after allowing for durability and replacement rate. In the case of household drapery the weights allotted represent the estimated annual consumption of each article by an average household, after allowance for durability and replacement rate. In allotting the weights the Committee had to take account also of rationing and the effect of wartime availability on consumption standards. For example, in the case of women's hose the estimated annual pre-war consumption was nine pairs per individual, but the factors mentioned led the Committee to base the weight for this item on a corresponding consumption of five pairs only. Price-quotations are collected from about sixty representative shops at the 15th of the month, by district officers of the Price Tribunal, the geographical coverage being the four main centres. Where prices are collected for more than one variety of an article the arithmetic mean of the quotations is taken. The price data for each sub-group arc combined into a sub-group index as follows : an average price of each article for the four centres combined is computed by taking the arithmetic mean of the quotations for the four centres. The appropriate commodity weights are then applied to the average prices and the products added to give the aggregate cost for the sub-group. This aggregate is then expressed as an index with the corresponding aggregate cost at the base date as base (= 1000). In computing the indexes for this group the Government Statistician's retail index employed the geometric mean of price ratios.

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Miscellaneous Group The miscellaneous group comprises 78 items arranged in the following nine sub-groups : fares ; crockery ; furniture ; household cleaning ; ironmongery and hardware ; papers, periodicals, and school stationery ; toilet and personal services ; postages and telegrams ; and tobacco. The group thus covers a wide range of sundry items commonly entering into the expenditure of an average household, and for which reliable and comparative price-quotations can be secured. Items such as medical and dental fees, insurance, charity contributions, recreation, &c, were expressly excluded on the grounds that no satisfactory representative measure of the cost of these items could be obtained. Direct taxation is also excluded, as an anomalous position would arise were the Court required to increase wages and other forms of remuneration consequent upon increases in rates of taxation levied for the purposes of the State. The miscellaneous group covers substantially the same sub-groups as in the Government Statistician's retail index, but. is wider in range of items within most sub-groups. The method of computing the indexes is also different, the Government Statistician employing principally the unweighted geometric mean of price ratios. This method is used in the Wartime Prices Index only in one or two cases where satisfactory consumption data were not available, otherwise the aggregate expenditure method is followed. Details of the various sub-groups are given below :— Fares. —This sub-group comprises rail and tram fares, the Government Statistician's quarterly' collection of cost data being utilized. For rail fares the unit cost per mile of the following nine classes of fare is measured, equal weight being given to each class :— Weight. Second return suburban fare for 8 miles (equal to 16 miles) . . .. . . 1 Second single ordinary fare, 8 miles . . . . .. . . . . 1 Suburban weekly, 8 miles (equal to 96 miles) .. . . .. 1 Suburban six-trip bearer ticket, 8 miles . . . . .. ~ . . 1 Weekly twelve-trip ticket, 8 miles (equal to 96 miles) . . . . .. 1 Monthly season ticket (suburban lines, 2nd class, 8 miles — 461 miles) .. .. 1 Twelve-trip bearer ticket, 8 miles (equal to 96 miles 2nd class) — Suburban .. . . .. .. .. .. .. 1 Ordinary . . .. . . .. .. .. .. . . 1 Second single ordinary fare, 40 miles . . .. . . .. . . 1 ■ The aggregate cost of the nine classes is totalled and expressed as an index with the corresponding aggregate cost at the base date as base (= 1000).

For tram fares the cost per 100 chains for ordinary cash and concession tickets in the four main centres is measured, weighted as under :—

For each centre application of the appropriate weights gives an aggregate cost which is expressed as an index with the corresponding aggregate cost at the base date as base (=-■ 1000), thus giving an index for tram fares for each centre. A combined rail and tram fare index is then computed for each centre by taking the arithmetic mean of the rail and tram fare indexes. The arithmetic mean of the.se four indexes is then taken to give the fares index for the Dominion, which is considered as covering suburban bus fares also, though data for these are not collected. Crockery. Standard lines of crockery were selected, based ou wartime availability. Pricequotations are collected as at the 15th of the month for which the return is made from about sixteen representative shops by officers of the Price Tribunal, the geographical coverage being the four main centres. The arithmetic mean of the prices for the four centres is taken to give an average price for all four centres combined for each article. The commodity weight applied to the price of each item represents the Index Committee's estimate of the annual household consumption of the item after allowing for durability and replacement rate. The sub-group index is arrived at by applying the commodity weights to the prices, adding the products, and expressing the resulting aggregate cost for the sub-group as an index with the corresponding aggregate cost at the base date as base (= 1000). Furniture.- A. representative range of standard furniture was selected in collaboration with expert offioers of the Price Tribunal, of good average type and design suitable for either a " modern " or " bungalow " type of home.

13

Weights. Section. Auckland. Wellington. Christchurcli. Dunedin. First-Cash .. .. 157 22 25 84 Concession .. 70 27 ' 25 3!) Second-Cash .. .. 118 21 80 47 Concession .. 64 8 38 9 Third—Cash .... 47 4 25 II Concession .. 40 !) 11 12 Fourth—Cash .... 17 2 4 Concession 10 5 2 Fifth-Cash .. .. 9 0-6 3 Concession . . 1 1-4 2 Sixth-Cash .... 7 .. 2 Concession .. .. .... 4 Seventh —Cash .... .. .. 1 Concession .. .. .. " Eighth-Cash ..:.'■.... .. ... ... : . Concession

H.—43

Price-quotations are collected as at the 15th of the month for which the return is made from about sixteen representative shops by officers of the Price Tribunal, the geographical coverage being the four main centres. The arithmetic mean of the prices for the four centres is computed to give an average price for all four centres combined for each article. The commodity weights were arrived at on the same basis as for crockery (i.e., estimated annual household consumption after allowing for durability and. replacement rate). The sub-group index is arrived at in the same way as for crockery. Household Cleaning. — Price-quotations are collected as at the 15th of the month for which the return is made for the four main centres by the Government Statistician in respect of laundry soap, starch, and blue, and by officers of the Price Tribunal in respect of the remaining items. Where prices arc quoted for more than one variety of an article (e.g., laundry soap) the arithmetic mean is calculated. The arithmetic mean of the prices for the four centres is taken to give an average price for all four centres combined for each article. The commodity weight applied to the price of each article represents the aggregate annual civil consumption of the article. The sub-group index is arrived at in the same way as for crockery. Ironmongery and Hard/rare. —A representative range of standard articles was selected in collaboration with expert officers of the Price Tribunal, based on wartime availability. Price quota-tions are collected from about sixteen representative shops as at the 15th of the month for which the return is made by officers of the Price Tribunal, for the four main centres. Where prices are quoted for more than one variety of an article (e.g., stew-pans, kettles, pie-dishes, and garden tools) the arithmetic mean is calculated. The commodity weights were arrived at on the same basis as for crockery (i.e., estimated annual household consumption after allowing for durability and replacement rate). The sub-group index is arrived at in the same way as for crockery. Papers, Periodicals, and School Stationery. —For newspapers and periodicals the Government Statistician's quarterly collection of data is utilized. Newspaper quotations are obtained for the four main centres from an association of newspapers. For periodicals quotations are secured from a large retail distributor covering some 32 weekly and monthly periodicals of New Zealand, Australian, English. and American origin. For both items the quotations represent book-shop, news-stand, or street sale prices. For school stationery four representative items which arc produced to standard specifications are included (namely, exercise-books (2 sizes) ; pad ; and drawing-book). Price quotations are collected for the four main centres by officers of the Price Tribunal. An index is first computed for newspapers, periodicals, and school stationery separately, and an equal weight is then applied to each index to arrive at the sub-group index. Toilet, and Personal Services. —Price-quotations arc collected as at the 15th of the month for which the return is made for the four main centres by officers of the Price Tribunal. For hair-cuts the Government Statistician's data are utilized. The arithmetic mean of the prices for the four centres is taken to give an average price for all four centres combined for each article. The commodity weights allotted represent the aggregate annual civil consumption of each article. The sub-group index is arrived at in the same way as for crockery. Postages and Telegrams. —The Government Statistician's cost data are used, quotations being obtained quarterly from the Post and Telegraph Department for a 1 oz. letter and a twelve-word ordinary inland telegram. The sub-group index number is derived by computing the unweighted geometric mean of price ratios. Tobacco.— -Price-quotations are collected for the four main centres as at the 15th of the mouth for which the return is made by the Government Statistician. Several brands of cut tobacco are included, the various quotations being averaged. The arithmetic mean of the prices for the four centres is taken to give an average price for all four centres combined. The latter is then expressed as a relative of a corresponding base period average (= 1000) to give the sub-group index number. In including tobacco in the regimen it was decided that any increase in price due solely to taxation should be excluded from measurement in the index. WARTIME PRICES INDEX 1943 (Base: 15th December, 1942 = 1000) 15th March .. 1011 15th June .. .. .. .. .. •• 1000 15th September .. .. .. .. .. 996 15th December .. .. .. LOOl 1944 15th March .. .. . • • • • • 1005 15th June 1001 APPENDIX A The regimen of the Wartime Prices Index is listed below, with quantity units, the weights for individual items, and, in addition, where relevant, comparative weights used in the compilation of the Government Statistician's retail-prices index. For the Wartime Prices Index " aggregate annual consumption " relates to household consumption by the civilian population of the Dominion after allowances had been made where necessary for military needs, rationing, availability of supplies, and changes in consumption habits, and is based mainly on data for the years 1940 and 1941. For some items (e.g., tinned peaches, prunes, fresh fruit) the weight allotted covers other similar items. In the case of the Government Statistician's retail-prices index " aggregate annual consumption " relates to the total population of the Dominion, and is based on aggregate household consumption data over the period 1926-1930.

14

H.—4P>

REGIMEN OF THE WARTIME PRICES INDEX

15

Commodity.. Unit of Quantity. Weight for Retail Weight for Wartime | I Index. Prices Index. (Aggregate annual consumption, less 00,000.' Food Group Groceries Sub-group Bread, cash over counter .. .. .. 2 lb. loaf .. 1120 1120 Potatoes .. .. .. 14 lb. .. 192 120 Onions .. .. .. .. 1 lb. .. 200 120 Flour, ordinary .. .. .. .. 25 lb. bag .. 42 40 Oatmeal .. .. .. .. 5 lb. bag .. 16 10 Rolled oats .. .. .. .. 4 lb. bag .. Not in 18 Rice, medium grade .. .. .. 1 lb. .. 80 60 Tea .. .. .. .. .. lib. .. 113 100 Coffee .. .. .. .. 1 lb. .. 8 10 Sugar, fine quality (1 and 1a) .. 1 lb. .. 1190 600 Jam, N.Z. plum or plum and apple .. 1 lb. tin .. 90 70 Honey . . .. . . . . . . 1 lb. carton . . 24 25 Golden syrup .. .. .. .. 2 lb. tin .. 20 25 Raisins .. .. .. .. .. 1 lb. packet .. 90 112 Peaches, canned, first grade .. .. lib. 14 oz. tin 20 50 Prunes (dried), .30-40 grade .. ..lib. .. 20 10 Salt, common .. .. .. ..lib. .. 172 120 Baking-powder .. .. .. .. 14 oz. tin .. Not in 20 Dairy-produce Sub-group Milk, fresh (delivered, bottled or not bottled) Quart .. 1120 1200 Bacon— Shoulder Hb. ' t0 \i7n 38 \ian Middle cut .. .. .. ..lib. .. 130/ 152/ Butter, factory-made, first grade .. 1 lb. .. 500 575 Cheese, ordinary.. .. .. 1 lb. .. 120 80 Eggs, fresh (Standard Grade) .. 1 doz. .. 100 100 Meat Sub-group Beef— { Sirloin .. .. .. .. lb. .. .. 313 269 Brisket .. .. .. .. lb. .. .. 30 28 Prime ribs .. .. .. .. lb. .. .. 306 261 Rump steak .. .. .. .. lb. .. .. 256 219 Topside .. .. .. .. lb. .. .. 189 162 Stewing steak .. .. .. .. lb. .. .. 569 488 Corned— Round .. .. .. .. lb. .. 214 184 Rolled .. .. .. .. lb. .. 200 173 Brisket .. .. .. . . lb. .. .. 20 15 2097 1799 SausagesPork .. .. .. .. .. lb. .. .. 47 28 Beef.. .. .. .. .. lb. .. .. 126 107 173 135 Mutton— Leg •• ■■ .. lb. .. .. 379 279 Shoulder .. .. .. .. lb. .. .. 335 247 Loin .. .. .. .. .. lb. .. 110 82 Neck .. .. .. .. lb. .. .. 222 165 Chops .. .. .. .. lb. .. .. 222 165 1268 938 PorkLeg .. .. * .. .. lb. .. .. 50 28 Loin .. .. .. .. .. lb. .. .. 37 21 Belly .. .. .. .. lb. .. .. 25 1.6 Chops .. .. .. .. lb. .. .. 34 20 146 85 Tripe .. .. .. .. .. lb. .. .. 50 43 Total, meat points .. .. .. .. 3734 3000 Fish, fresh groper (hapuku) .. ,. I lb. ,. ,, 300 300

H.—43

16

„ tt c r\ i-i Weight for Retail Weight for Wartime Commodity. Unit of Quantity. B Index . Prices Index. • Fresh Fruit and Vegetables Sub-group Vegetables— Carrots .. .. .. lb. .. .. Not in .. 3 Parsnips .. .. .. lb. .. .. „ .. 1 Swedes .. .. .. lb. .. .. ,, .. 1 Cabbages .. .. .. lb. .. .. ,, .. 3 1 ruit — (Aggregate annual consumption, less 00,000.) Lemons (N.Z. only) .. .. lb. .. .. Not in .. I 240 Apples, eating and cooking .. lb. .. .. „ .. I 700 Rent Group Rentals of four-, five-, and six-roomed houses for the following classes: State; State reverted ; Private. FUEL AND Light GROUP (Aggregate anmml con8umptlonj Ie8a 00j00(u Coal, household .. .. .. ■ ■ i • ■ 36 32 Coke, household .. .. .. 1 cwt. sack .. 8 4 Gas .. .. .. .. .. Per 1,000 cubic 19 30 feet (net) Electric current .. .. .. 23 units (net — 9 300 lighting, 7 units; heating, 16 units) Clothing, Footwear, and Household Drapery Group Annual Quantity Item. Unit of Quantity. Weight per Individual. Men's Wear Suit, N.Z. wool, r.m. .. .. .. .. .. Each .. 1*0 Working overalls, denim .. .. .. .. .. „ .. 1-0 Overcoat, N.Z. tweed, r.m. .. .. .. .. „ .. 0-25 Raincoat, cotton gaberdine .. .. .. .. ,, .. 0-25 Hat, fur felt . . .. .. . . . . . . ,, .. 1-0 Shirt, cotton .. .. ., .. .. .. ,, .. 1-5 Shirt, working, drill .. .. .. .. .. ,, .. 1*5 . . Singlet— Wool .. „ .. 1-5 Locknit .. .. .. .. .. .. „ .. 1-5 Underpants — Wool .. .. .. .. .. .. Pair .. 1 vf> Interlock .. .. .. .. .. .. ,, .. 1-5 Socks— Wool „ .. 2-0 Worsted .. .. .. .. .. .. „ .. 4-0 Pyjamas, flannelette .. .. .. .. .. ,, .. 1*5 Pullover, worsted .. .. .. .. .. Eacb .. 1-0 Sports coat, N.Z. wool, r.m. .. .. .. .. ,, .. 1-0 Sports trousers, worsted, r.m. .. .. .. .. Pair .. 1-0 Boots, men's — IX :: :: :: :: :: } - ■■ Shoes, men's — Heavy .. .. .. .. .. \ , , Light .. .. .. .. .. j " Repairs: Half-soled and heeled (sewn and riveted) .. .. „ .. 3-0 Women's Wear Frock material — Art. silk .. .. .. .. .. .. Yard .. 0-25 Wool .. .. .. .. .. .. ,, .. 0-25 Cotton .. .. .. .. ... .. ,, .. 0-25 Skirt — N.Z. tweed, r.m. .. .. .. .. .. Each .. 0-75 N.Z. worsted, r.m. .. .. .. .. ,, .. 0-75 Hat, wool felt .. .. .. .. .. .. ,, .. 2-0 Frock — Wool, r.m. .. .. .. .. .. .. ,, .. 0-75 Art. silk, r.m. .. .. .. .. .. .. „ .. 0-75 Cotton, r.m. .. .. .. .. .. .. ,, .. 0-75 Corselettes .. .. .. .. .. .. ,, .. 2-0 Vests — Wool .. „ .. 1-5 Locknit ., . ,. .. .. .. „ .. I 1-5

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3—H. 43.

17

Annual Quantity Item. Unit of Quantity. Weight per individual. Bloomers — Wool .. .. •• •• ■■ •• Pair •• 1-0 Locknit .. .. .. ■• •• ■• ,. •• 2-0 Pantees, locknit .. .. .. .. .. • • „ • ■ 1 - 0 Underslip, locknit .. .. .. .. •• Each .. 0-5 Nightdress, locknit .. .. .." .. ■• ,, ■• 1*0 Pyjamas, wincyette .. .. ■■ •■ •• Pair •■ I'O Stockings — Silk „ •• 4-0 Lisle .. ■• ... 1-0 Gloves, nappa .. . . .. .. .. • • ,, ■ • 1 "0 Smock, dirndl .. .. .. .. .. •• Each .. 3-0 Pullover, wool .. . . . . . ■ .. ■ • ,, • • 1 '5 Overcoat, N.Z. tweed, r.m. .. .. .. .. ,, ■ ■ 0-5 Raincoat, cotton gaberdine .. .. .. .. „ • • 0-5 Shoes — Heavy .. .. •• •• ■• •■ Pair •• ' 1>5 Light .. •• ■■ •• 1-5 Repairs: Half-soled and heeled (sewn and riveted) .. .. „ .. 3-0 Boys' Wear (10J Years) Suit, N.Z. wool, r.m. .. .. .. .. .. Each .. 1-0 Shorts, N.Z. tweed, r.m. .. .. .. .. ... Pair .. 2-0 Overcoat, N.Z. tweed, r.m. .. .. .. .. Each .. 0-5 Raincoat, cotton gaberdine .. .. .. .. „ ■ • 0*5 School cap .. .. .. •■ •■ •• ii •• I'O Singlet— Wool. m •■ 1-5 Interlock .. .. .. .. .. „ •• l'B Underpants — Wool .. .. •■ •• •• •• Pair •• 1-0 Interlock .. .. . ■ • • • • • • » • • l"0 ShirtFlannel .. .. •• ■■ ■ ■ ■• Each .. 2-0 Cotton •• ■• •• 2-° School hose .. .. .. •• ■■ •■ Pair .. 4-0 Pyjamas, flannelette .. .. .. •• •■ » ■■ 1'5 Jersey, wool .. . . .. • • .. • • Each .. 0-5 Boots, heavy .. ... .. .. . ■• •• Pair .. 1-0 Shoes — Light ,, •• 1-0 Brown sandals .. .• ■• •• •• » •■ *-'V Repairs: Half-soled and heeled (sewn and riveted) .. .. „ ■• 3-0 Girls' Wear (7 Years) Gym frock, r.m. .. .. .. •• •• •• Each .. 1-0 FrockWool, r.m. .. .. .. •• •■ ■• •• 1- ° Cotton, r.m. .. .. ... .. • • ■ • „ • ■ l"0 School hat, felt .. .. .. .. •■ •• ,, "• • 1-5 VestWool » •• 1'6 Interlock .. .. ■• •■ ■• •■ j> •■ I'D BloomersWool .. •• ■• •• •• •• P air ■■ l-5 Interlock .. .. •• •• ■■ •■ » •• 2-5 Stockings, cashmere .. .. ■■ •• •• » ■• 4-0 Sockettes, lisle .. .. .. •• •■ •• » ■■ 2-0 Nightdress, locknit .. .. .. ■• ■■ Each .. 1-0 Pyjamas, wincyette .. .. ■■ •• •• Pair •■ I'O Cardigan, wool .. .. ., •• Each .. 1-0 Overcoat, N.Z. tweed, r.m. .. .. •• •• „ •• 0-5 Raincoat, cotton gaberdine .. .. •■ •■ „ •• 0-5 Shoes — Heavy .. • • •■ ■• •• •• Pair •• 1-0 Light » ■• {-J Brown sandals .. .. • • • • • • » ■ ■ x -u Repairs: Half-soled and heeled (sewn and riveted) .. .. „ •■ 3-0 Child's Wear (under 5 Years) Clydella Yard •• 4-0 Shirt, cotton .. .. •■ •■ •• ■• Each .. 3-0 Pants, N.Z. wool, r.m. .. .. •• ■• •• Pair •■ 3-0 Overcoat, N.Z. tweed, r.m. .. •• •• •• Each .. 0-5 Singlet, wool .. .. •• •• •• • • » •■ 3-0 Pyjamas, wincyette .. .. • • • • • • Pair Jersey, wool .. .. •• .•• •• •• Each .. 1-0 Socks, wool Pair .. 4-0 Shoes (patent and calf) .. .. •• •• • • ,. •• 3- ° Felt slippers .. .. •• •• ■• ■• » •• I't Repairs: Half-soled and heeled (sewn and riveted) .. ._._ ,.. ■■ < *-0

H.—43

Miscellaneous Group Fare.a (a) Railway— Weight. Second return suburban fare for 8 miles (equal to 16 miles) . .. . . 1 Second single ordinary fare, 8 miles .. .. .. .. .. .. 1 Suburban weekly, 8 miles (equal to 96 miles) .. . . . . .. . . I Suburban 6-trip bearer ticket, 8 miles .. .. .. .. .. .. I Weekly twelve-trip ticket, 8 miles (equal to 96 miles) .. .. .. .. 1 Monthly season ticket (suburban lines, 2nd class, 8 miles —461 miles) .. .. 1 Twelve-trip bearer ticket, 8 miles (equal to 96 miles, 2nd class)— Suburban .. .. .. .. ~ .. ~ .. 1 Ordinary .. .. .. .. .. .. .. .. 1 Second single ordinary fare, 40 miles .. .. .. .. .. .. 1 (b) Tramway: —

18

Annual Quantity Item. Unit of Quantity. Weight per Household. Household Drapery Blankets— Double .. .. .. .. .. .. Pair .. 0-1 Single „ .. 0-2 Sheets— Double, 80" .. .. .. .. .. .. .. 0-5 Single, 54" .. .. „ .. 1-0 Pillow-slip .. .. .. .. .. .. Each .. 5-0 Towel .. .. .. .. .. .. .. .. 4-0 Tea-towel .. .. .. .. .. .. „ .. 4-0 Table-cloth .. .. .. .. .. „ .. 0-4

Weights. Section. ; Auckland. Wellington. Ohristohurch. Dunedin. First—Cash .... 157 22 25 84 Concession .. 70 27 25 39 Second—Cash .. .. ]]8 21 80 47 Concession .. 64 8 38 9 Third -Gash .... 47 4 25 14 Concession .. 40 9 11 12 Fourth—Cash .... 17 2 4 Concession .. 10 5 2 Fifth Cash .... 9 0-G 3 Concession .. 1 1-4 2 Sixth—Cash .... 7 .. 2 Concession . . .. . . 4 Seventh—Cash .... .. .. 1 Concession Eighth—Cash Concession Annual Quantity ftem. Estimated Life. Number. Weight per H onsehold. Crockery Plate, white earthenware. — Large .. .. .. .. 2 years .. 6 3-0 Small .. .. .. .. 2 „ .. 6 3-0 Cup and saucer, white earthenware— Tea size .. .. .. . . 1 year . . 6 6 ■ 0 Breakfast size .. .. .. . . 1 ,, .. 6 6-0 Mixing-bowl — Large .. .. .. .. 5"\ t f0-l Small 5> ears •• 1 {o-l Furniture Bedstead, 4'6" .. .. .. .. 15 years .. 3 0-2 Dressing-chest, 3' 6" .. .. .. 15 „ .. 3 0-2 Wardrobe, 3'6" .. .. .. . . 15 „ .. 2 0-13 Mattress — Wire, 4'6" .. .. .. 9 „ .. 3 0-33 Wool, 4'6" 6 „ .. 3 0-5 Pillow .. .. .. .. 6 „ .. 6 1-0 Dining-table, extension 3' fi" x 3' . . .. 15 ,, . . 1 0-07 Dining-chair .. .. .. 10 .,, .. (i O-β Sideboard .. . . . . . . 15 ,, . . 1 0-07 Kitchen — Table 15 „ .. 1 0-07 Stool, unpainted .. .. .. 10 ,, .. 0-2 Occasional table .. .. .. .. 10 ,, .. 1 0-1

H.—43

Papers, Periodicals, and School Stationery

19

T , TT ., ,... ... Weight for Retail Weight for Wartime Item - Umt of Quantity. Index P rieeS Index. i Household Gleaning (Aggregate annual consumption, loss 00,000.) Soap, laundry (medium grade, ll>. .. .. .. 244 290 40 bars to hundredweight) Starch .. .. .. 11). .... .. 12 7 Blue (half-dozen knobs to packet) pkt. .. .. .. 8 Cleanser (Old Dutch) .. Tin .. .. .. .. 24 Boot-polish (Nugget) .. Tin, small .. .. .. 24 Clothes-pegs.. .. .. Doz. .. .. .. .. 24 Sand-soap .. .. .. Cake (small size) .. .. .. 24 Annual Quantity Item. Estimated Life. Number. Weight per Household. Ironmongery and Hardware Enamelware — Stew-pan, 14 cm. .. .. .. 5 years .. 3 0-6 Kettle .. .. .. .. 3 „ .. 1 0-33 Teapot, 2 pint .. .. 5 „ .. 1 0-2 Preserving-pan, 16 pint .. . . 8 ,, .. 1 0-12 Colander, 9" 3 „ .. 1 0-33 Pudding-basin, 7" .. .. . . 5 ,, ... 2 0-4 Pie-dish, 8" 2 „ .. 2 1-0 Jug, 3 pint .. .. .. .. 5 „ .. 3 0-6 Mug, half-pint .. .. ... 1 „ .. 2 2-0 Basin (large and small) .. .. .. 5 ,, .. 1 0-2 Tinware — Tin dipper, 2 quart .. .. .. 1 year .. 1 1-0 Cake-tin, round, 7" .. .. .. 3 years .. 2 0-67 Sandwich-tin, round, 8".. .. .. 3 „ .. 2 0-67 Cutlery and Silver — Knives — Dessert, not stainless .. . . 8 years .. 6 0 • 75 Table, not stainless .. .. .. 8 ,, .. 6 0'75 Teaspoons, not stainless .. .. 10 ,, .. 6 0-6 Dessert spoons, not stainless .. . . 10 ,, .. 6 0-6 Dessert forks, not stainless .. .. 10 „ .. 6 0-6 Table spoons, not stainless .. 10 ,, .. 6 0'6 Table forks, not stainless .. . . 10 ,, .. 6 0-6 Garden Tools — Spade .. .. .. .. 8 years .. 1 0-12 Axe, 41b. .. .. .. .. 10 „ .. 1 0-1 Eake, 12-tooth .. .. .. 10 „ .. 1 0-1 Hoe, 7" .. .. .. .. 10 „ .. 1 0-1 Brushware — Com brooms .. .. .. .. 1 year .. 1 1-0 Mop, white cotton, 12 oz. .. . . 1 ,, .. 1 1*0 Broom, hair and fibre, 12" .. . . 1 ,, .. 1 1*0 Scrub brush, small .. .. .. Half-year .. 1 2-0 Bannister brush, flat back .. .. 2 years .. 1 0-5 Sundries — Washboard, wood, square top .. .. 5 years .. 1 0-2 Bucket, galvanized, 12" .. .. 3 „ .. 1 0-33 Fry-pan, 10" .. .. .. .. 5 „ .. 1 0-2 Bake-pan, 12" 2 „ .. 2 1-0 Fire-shovel, 6" 8 „ .. 1 0-12 Mincer 20 „ .. 1 0-05 Electric light globe — 60 W 1 „ ■■ 2 2-0 100 W. ■■ ■■ 1 „ 2 2-0

tt .i !• r\ i'i Weight for Wartime Item. UmtofQuantrty. | rices Imlex . Papers (N.Z.) .. .. Periodicals (N.Z. and overseas) School stationery — Exercise-book — 8-|" x 6J* (28 leaf) 1 1 10" x 8" (32 loaf) 1 1 Pad, 10" x 8" (30 leaf) . . 1 1 Drawing-1 k, 12 : J" x y£" (8-8 leaf) .. ■■ ■■ 1 1 __1 * Price relatives.

H.—43

APPENDIX B GBOUP AND SUB-GROUP WEIGHTS The group and sub-group weights for the Wartime Prices Index, with comparative weights used in the compilation of the Government Statistician's Retail Prices Index, are shown below :—

20

Item. Unit of Quantity. Weight for Wartime ■' Prices Index. Toilet and Personal Services (Aggregate annual consumption, loss 00,000.) Tooth-paste .. .. .. .. 2 tubes per person per annum .. • 30-8 Soap— Toilet .. .. .. .. 9 cakes per person per annum .. 138 -6 Shaving .. .. .. 1 stick per male sixteen years and 4 • 6 over per annum Razor-blades (packet of five) .. ..10 packets per male, sixteen years 46-5 and over per annum Hair-cuts .. .. .. ..9 per head, both sexes, per annum ! 138• (> Postages and Telegrams Letter .. . . .. . . 1 oz. letter . . . . . . * Telegram .. . . . . . . Twelve-word ordinary inland tele- * gram Tobacco Tobacco (cut) .. .. . . 2 oz. tin . . .. . . * * Price relatives.

Wartime Prices Index. Retail Prices Index. Group and Sub-group. — : Sub-group Group Sub-group Group Weights. Weights. Weights. Weights. Food Group— Groceries .. .. .. .. .. 13 11'25 Dairy-produce .. .. .. .. 10 10-53 Meat .. .. .. .. .. JO 14-58 Fresh Fruit .. .. .. .. .. 3 Fresh Vegetables .. .. .. .. 3 Total, Food Group .. .. .. 39-0 36-31 Rent .. .. .. .. .. .. .. 25-0 .. 20-97 Fuel and Light .. . . . . . . . . .. 7-0 ,. 7.59 Clothing, Footwear, and Household Drapery - Men's Wear .. .. .. .. 3 • 4 Women's Wear .. .. .. 4-2 Boys' Wear, 10| years .. .. 2-5 Girls' Wear, 7 years .. .. .. 2-5 Child's Wear, under 5 years .. .. 1-4 Total, Clothing and Footwear .. 14-0 Household Drapery .. .. .. .. 1-0 Total, Clothing, Footwear, and Household ■ 15-0 .. 15-51 Drapery Miscellaneous — Fares .. .. .. .. .. 4-5 4-25 Crockery .. .. .. .. .. 0-5 0-32 Furniture .. .. .. .. .. 2-0 1-91* Household Cleaning .. .. .. .. 1-5 1-34 Ironmongery and Hardware .. .. .. 0-5 0-45 Papers and School Stationery — Papers .. .. .. .. 0-66 Periodicals .. .. .. .. 0-66 School Stationery .. .. .. 0-66 2-0 2-46 Toilet and Personal Services .. .. .. 1-0 0-66 Postages and Telegrams .. .. .. .. 0-5 0-63 Tobacco .. .. .. .. .. 1-5 1-60 Total, Miscellaneous .. .. .. 14-0 13-62 Total, All Groups .. .. .. .. 100-0 100-00 * Furnishings.

FT.—43

APPENDIX C HOUSEHOLD BUDGET COLLECTION, 1930: CENSUS AND STATISTICS DEPARTMENT The New Zealand Census and Statistics Department undertook a household budget collection in 1930 in connection with the revision of the retail-prices index in that year. The collection comprises 318 budgets representative of households in all parts of the country, both rural and urban, and covers a comprehensive range of occupations, as under : — Number of Budgets. Clerical .. .. .. .. .. .. •• ..140 Farming .. .. .. ■ • • • • • • • ...16 Labourers .. . . . . .. .. .. .. 34 Salesmen and shop-assistants . . . . .. .. .. 27 Tradesmen . . .. . . .. .. .. • ■ 82 Other occupations . . .. .. .. .. .. 19 Total .. .. .. 318 The average number of persons in the households included in the inquiry was 4-33, and the average income was £275 per annum. It is to be noted that the commodity weights used in the compilation of the Government Statistician's retail-prices index represent the average Dominion aggregate household consumption of the various items concerned, and are not based on the results of the budget inquiry. The budget inquiry was, however, utilized for the purpose of determining the correct relative group and sub-group weights, except in the case of the Food sub-group weights, which are based on Dominion aggregate expenditure on the respective sub-groups in the base period.

The following statement, made available by courtesy of the Government Statistician, shows the percentage distribution of the budget expenditure in detail : —

21

T yl , ..Expends, £%£& T y »*■*& i 7''oor/ — iffiewi—continued Groceries— Fire insurance (dwelling) . . 0-56 Bread .. .. 3-23 Other dwelling costs .. 1-99 Flour .. .. 0-87 21-93 Sugai .. .. 1*14 Fuel and Lighting .. .. 6-17 Tea .. .. 1-33 6-17 Baking-powder .. ■ 0- 1 4 Clothing, Drapery, Footwear — Biscuits .. .. 0-38 Clothing and drapery .. 9-77 Breakfast food .. 0-50 Footwear .. .. 2-84 Dried fruits .. .. 0-43 — 12-61 Flavouring-essences . . 0-05 Miscellaneous — Honey .. .. 0-12 (a) Groups separated — Jam'.. .. .. 0-09 Fares, train and tram 3-46 Mustard .. .. 0-04 PapersPepper .. .. 0-03 Educational 0-89 Rice.. .. .. 0-30 News, &c. 1-11 Salt .. .. .. 0-08 2-00 Sauces .. 0-14. Furnishing .. 1-55 Savouries .. .. 0-03 Tobacco .. .. l<80 Spices .. .. 0-05 Cleaning (household) 1-09 Soups .. .. 0-06 Personal services .. 0-54 Syrups .. .. 0-06 Postage and telegrams 0-51 Vegetables, dried .. 0-01 Ironmongery and 0-37 Vegetables, essences .. 0-08 brushware 9-16 ! Crockery .. .. 0-26 Dairy-produce — 11-08 Bacon .. .. U-90 (6) Other ExpenditureMilk .. .. .. 3-57 Sports .. .. 2-20 Butter .. .. 3-57 Trade-union dues .. 0-18 Cheese .. 0-27 Charity .. .. 0-18 Eggs.. .. .. 0-78 Church .. .. 0-66 9-09 Domestic help ..' 0-50 Meat and Fish— Fowl-food .. 0-78 Meat . . .. 5-62 Gardening . . 0-26 Fish .. ... 0-55 Gifts .. .. 0-64 Meat-essences.. .. 0-0L Medical .. .. 2-38 6-18 I Music .. .. 0-87 Vegetables .. 3-45 Other .. .. 1-55 3-45 I 10-20 Other Foods — •..-.. ('■) Insurance, AcBaby foods .. . . 0-07 Life insurance— Drinks .. .. 0-14 Own .. .. 2-55 Meals .. . . 0-32 Family .. .. 0-93 Cakes .. .. 0-52 Fire insurance 0-30 Other foods . . . . 0-59 (furniture) 1-64 Superannuation .. 2-40 National Provident 0-33 Total, Food .. 29-52 Friendly society 0-78 (medical) 7-29 Rent— ((/(Savings .. .. 1-21 Rent .. .. .. 9-06 1-21 Mortgage .. .. 8-67 —: Rates .. .. .. 1-65 Total .. .. | 100-00 100-00

H.—43

APPENDIX D STANDARD OF LIVING SURVEY OF TRAMWAY WORKERS AND BOOT AND SHOE OPERATIVES The above survey of urban living standards for the groups mentioned was conducted in 1988-39 by the Social Science Research Bureau of the Department of Scientific and Industrial Research. The results of the survey are unpublished, and the information given below, reproduced by permission of the Secretary of the Department of Scientific and Industrial Research, is based on a typescript statement prepared in 1941 by Mrs. D. Sorrell, a former member of the Bureau's staff. The Bureau is not now functioning. Scofje of Survey. —Budgets covering four weeks for 128 tramwaymen's and 122 boot and shoe operatives' households were analysed, covering married workers only. The average annual family incomes for these groups (including contributions from children working, &c.) were £3i 1 (126 families) and £260 (116 families) respectively. For the combined group the average was £287 per annum. Period, covered. —Budgets were kept for four consecutive weeks, most of them during the period from August to November, 1938. There were a few for July and December, 1938, three in January, 1939, and one each in February and March, 1939. Size of Households. —The average number of persons per household was : — Tramway workers .. .. ~ .. 4-73 Boot and shoe operatives .. .. .. .. 3• 85 Combined group .. .. .. .. .. 4-30

Distribution of Budget Expenditure. —The following statement gives the percentage distribution of expenditure in detail, based on 128 tramway men's budgets and 119 boot and shoe operatives' budgets, three of the latter being excluded from the total of 122 given above owing to special circumstances : —

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,.,, ... I'ercentaj'e _. ,. ., ... Percentage Type of Expenditure. Distribution. ° f Kx^"'ht ""'• ■ Distribution. , 1 Housing ■:. .. .. 19-94 .f'ood —continued 19-94 Sugar, feeJam and marmalade .. 0-23 i''ood — Sugar .. .. 1-20 Beverages — Syrup, treacle, and honey 0 ■ 22 Cocoa .. .. 0-09 1-65 Coffee .. .. 0-07 VegetablesTea .. .. 1-21 Fresh-1-37 j Onions .. .. 0-23 Bread, &c— Potatoes .. .. 0-99 Biscuits .. .. 0-54 Other .. .. 1-85 Bread .. .. 3-03 Dried .. .. 0-03 Cakes, fee. .. .. 1-42 Tinned and bottled .. 0-13 4-99 3-23 Cereals, fee. — Other Foods — Breakfast foods .. 0-44 Cooking fats .. .. 0-03 Flour .. .. 0-41 Meals out .. .. 0-37 Rice, &c. .. .. 0-28 Miscellaneous .. .. 1-57 1-13 1-97 Dairy Products— —— Butter .. .. 3-90 Total, Food .. .. 35-25 Cheese .. .. 0-30 Cream .. .. 0-28 Glothmg— Milk— Clothing .. .. 7-84 Fresh .. .. 3-82 Boots and shoes . . . . 1-93 Tinned .. .. 0-03 Repairs to boots and shoes U-45 —— 8-33 10-22 Eggs .. .. .. 1 • 73 Fuel and Light — 1-73 Coal .. .. .. 1-94 Fruit— Coke .. .. .. 0-17 Fresh — Firewood, matches, &c. .. 0-47 Apples .. .. 0-58 Electricity .. .. 1-55 Bananas .. .. 0-37 Gas .. .. 1-44 Oranges .. .. 0-45 5-57 Other, and nuts .. 0-80 Other Items— Dried .. .. 0-51 Household Requirements — Tinned and bottled .. 0-27 Crockery and glassware 0-22 2-98 Ironmongery, fee. .. 0-27 Meat, &c.— Household linen .. 0-79 Bacon and ham .. 0-73 Furnishings .. .. 3-26 Fish, fresh .. .. 0-82 HouseholdFish and chips .. 0-09 Equipment .. .. 1-05 Fish, tinned, fee. .. 0-33 Cleansers .. .. 0-98 Meat — Other household operating 0-28 Fresh .. .. 5-83 expenses 6 • 85 Tinned and potted .. 0-07 Insurances .. .. 4-78 7-87 —- 4-78

H. —43

Approximate Cost of Paper.—Preparation, not given : printing (1,140 copies), £50.

Authority: E. V, Paul, Government Printer, Wellington.—l 944.

Price 9d.]

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Typo of Expenditure. gSSSSSSL T ™° of E **— SSSSRu Other Items —continued Other Items —continued Leisure-time Activities — Transport — Holidays .. .. 0-13 Fares .. .. 2-02 Newspapers, magazines, 0-99 Motor-oar expenses 2-04 &c. Bicycle .. .. 0-28 Cinema .. .. 0-84 4-34 Dances and concerts .. 0-24. Miscellaneous — Sports and games .. 0-25 Education .. .. 0-30 2-45 Books, stationery, postage, 0-50 Medical — and telephone Doctor, dentist, &c. .. 0-85 Drink .. .. .. 0-19 Hospital .. .. 0-11 All other .. .. 5-26 Medicines, medical appli- 0-94 — 6-25 ances, &c. 1-90 Personal— Total, other items .. .. 29-02 Toilet .. .. 0-83 Tobacco and cigarettes .. 1-62 Total expenditure .. 100-00 100-00 2-45