Price index of public expenditure: documentation of statistics
The documentation of the statistics describes how the statistics were compiled and what methods were used in the compilation. The data help interpret the figures of the statistics and evaluate their reliability and comparability. The quality report is based on the EU's SIMS model. The documentation also contains change releases describing changes in the statistics and possible specifying methodological descriptions.
If you are looking for statistical figures for these statistics, go to the statistics page: Price index of public expenditure
Quality report
Data description (SIMS 3.1)
The price index of public expenditure measures the price development in the expenditure of central government and local government (municipalities and joint municipal authorities). The data are collected from different sources and published quarterly.
Sector coverage (SIMS 3.3)
The price index of public expenditure covers central and local government finances and the finances of joint municipal authorities.
Statistical unit (SIMS 3.5)
For central government finances, the statistical unit is administrative branch. The different administrative branches include General Administration, the Ministry for Foreign Affairs, the Ministry of the Interior (including the Police, the Border Guard and ‘Ministry of the Interior, other’), the Ministry of Defence, the Ministry of Finance, the Ministry of Education (‘Ministry of Education, other’), the Ministry of Agriculture and Forestry, the Ministry of Transport and Communications, the Ministry of Economic Affairs and Employment, the Ministry of Social Affairs and Health, and the Ministry of the Environment.
Expenditure in local government finances is recorded by function area. The local government function areas include General Administration, Social and Health Services (Social Services and Health Care), Education and Cultural Services (Education and ‘Cultural Services), Other Services, and Business Activities.
Statistical population (SIMS 3.6)
For central government finances, the weight structure has been obtained from the final central government accounts (financial statements) for 2014.
In the accounts, expenditure is classified according to the main title, class and item of the budget, as well as according to the general account and the accounting office.
The index for local government finances is weighted according to the sum of expenditure in the financial statements for 2015 (including consolidated purchases of services). The weight structure of the 2015=100 price index of local government finances does not add up to 100% based on municipalities and joint municipal authorities due to the consolidation of the purchases of services. Internal rents are included in the indices classified by function area, However, they are not included in the index classified by type of expenditure. Of investments, only land purchases are taken into account. The 2015 weights also include local authority owned companies because they are not separately reported in the 2015 financial statements.
Reference area (SIMS 3.7)
The calculation of the price index of public expenditure takes account of all on-budget entities of central government, and the calculation of the indices of local government finances all Finnish municipalities and joint municipal authorities.
Time coverage (SIMS 3.8)
The length of the index time series varies depending on when the production of the base year index started. The sub-index structure has changed over time and is not fully comparable throughout the period. The price index of public expenditure has been produced since 1975. The index base years have been 1977=100, 1985=100, 1995=100, 2000=100, 2005=100, and 2010=100. The oldest time series have not been calculated up to the present time.
Because of the preliminary nature of the index of wage and salary earnings, the price index of public expenditure is also preliminary. The index point figures become revised over the year, and the final data for the year are generally published in connection with the release for the second quarter of the following year.
Base period (SIMS 3.9)
The latest reference period for public expenditure is 2015. As a rule, the index base year is renewed every five years. The value data used in the base year weight structure may be from a period other than the base year.
The latest index base year is 2015=100. The earlier base years are: 2010=100, 2005=100, 2000=100, 1995=100, 1985=100, 1977=100.
The index is updated quarterly approximately seven weeks after the end of the reference quarter. The price level for each month is compared with the price level for the base period. The annual index is published in connection with the release of the data for the last month of the year.
Unit of measure (SIMS 4)
Data for the price index of public expenditure are published as index point figures. In addition, the change percentages calculated on the basis of the indices are published. The base period is indicated by the figure 100.
The index weight data are based on the final accounts of the central government on-budget entities and on the final accounts of the local government. The weight data are relative percentages of total expenditure.
Reference period (SIMS 5)
The data are published quarterly.
The index is updated quarterly approximately seven weeks after the end of the reference quarter. The price level for each month is compared with the price level for the base period. The annual index is published in connection with the release of the data for the last month of the year.
Concepts and definitions (SIMS 3.4)
Annual change
Annual change is the relative change of the index in comparison with the corresponding time period one year ago (e.g. annual change of total index of consumer prices, i.e. inflation).
Base index
In the base index the price of the calculation period is always compared with the base period. In the base index weights are usually changed less often than yearly, for example, at intervals of five years.
Chain index
In the chain index the comparison takes place always between successive calculation periods. In the chain index the change in two calculation periods is used to take forward the index point figure of the desired base period. In the chain index the weights are changed in principle in each calculation period. At times the chain index is also mentioned in such cases where the comparison period is retained fixed in comparisons within the year, but the comparison period and the weight structure of the index is changed whenever the year changes.
Index
An index is a ratio describing the relative change in a variable (e.g. price, volume or value) compared to a certain base period (e.g. one year). The index point figure for each point in time tells what percentage the given examined variable is of its respective value or volume at the base point in time. The mean of the index point figures for the base period is 100.
Index formula
Index formula is a mathematical function by means of which an individual key figure describing change is calculated from observation values (e.g. Fischer, Laspeyres and Paasche index formulas).
Point figure
Point figure is a change quantity used in price indices, which expresses the price, average price or index of the comparison period relative to the price, average price or index of the base period. The point figure of the base period is usually denoted by the number hundred. For example, if the point figure for a commodity at a certain point in time is 105.3, it means that the price of that commodity has risen by 5.3 per cent from the base period.
Price index of public expenditure
The price indices of public expenditure (PIPE) measure the development of prices in the expenditure of central and local governments. The indices have been used for decision-making about central and local government finances, and for diverse studies. The indices are suitable for calculations at constant prices, and for estimations of volume changes in the public economy and expenditure.
Quarterly change
Quarterly change refers to the relative change in the index of the quarter compared with the index of the previous quarter. The change is usually expressed in percentages.
Weight structure
Describes what meaning each sub-index (commodity, employee group, etc.) belonging to the index has for total index.
Institutional mandate (SIMS 6)
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the General Data Protection Regulation, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Further information: Statistical legislation
Legal acts and other agreements (SIMS 6.1)
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Further information: Statistical legislation
Data sharing (SIMS 6.2)
The data are published monthly on the home page of the statistics as StatFin database tables.
Source data (SIMS 18.1)
The price index of public expenditure is largely calculated on the basis of the wage, price and cost indices produced by Statistics Finland. In addition to using other, completed indices, price and tariff data are collected, for example, from social insurance contribution data, employment pension indices, and interest rate data. The index does not necessarily measure possible transfers, such as current transfers, in the economy.
Where possible, such changes should be taken into account in the index at least when revising the weight structure.
The data sources of the price index of public expenditure are described in more detail in the methodological description.
Frequency of data collection (SIMS 18.2)
Depending on the source data, data are collected monthly, quarterly or annually. In general, the frequency of the data collection is quarterly.
Data collection (SIMS 18.3)
Most of the index data are based on point figures of other indices. Interest data and percentage data concerning indirect wages are collected from data suppliers’ websites. Percentage data concerning indirect wages for special groups are collected from data suppliers via an email survey once a year.
Data validation (SIMS 18.4)
Before the index is calculated, it is made sure that all the relevant price observations are included. The validated price observations form the statistical data. Temporarily missing price observations are imputed on the basis of changes in the prices of other similar products, or the price of the previous month is used. In the case of permanently missing price observations, a new data supplier is selected from among operators of the same size. The index point figures are calculated with the base strategy using the Laspeyres index formula.
The observations are aggregated with weighting coefficients for products and data providers to the higher product group levels and finally into an overall index. The weight coefficients are used to estimate index point figures and price changes describing the population.
Data compilation (SIMS 18.5)
Several other indices are also used to calculate the index, which have gone through their own calculation process. Only limited amounts of data or prices collected by Statistics Finland are used in the calculation of the price index of public expenditure. The aim is to collect all the data necessary for calculating the index from external sources. If a data item is missing, the previous price is often used.
Overall accuracy (SIMS 13.1)
The index provides a comprehensive picture of price developments in public expenditure. The wage, price or cost indices produced by Statistics Finland that reliably describe the expenditure have been separately determined for each type of expenditure. Many of the indices can be inaccurate indicators in certain sectors, such as the measurement of investment costs. In contrast, wage index data are generally quite useful. The above process provides a clear view of the cost level of public expenditure at a given point in time.
The index is largely calculated on the basis of the wage, price and cost indices produced by Statistics Finland. Most index series are obtained from the index of wage and salary earnings, which is published as preliminary data. Because of the preliminary nature of the index of wage and salary earnings, the price index of public expenditure is also preliminary. The index point figures become revised over the year, and the final data for the year are generally published in connection with the release for the second quarter of the following year.
Quality assurance (SIMS 11.1)
Quality management requires comprehensive guidance of activities. The European Statistics Code of Practice forms the basis for the common quality system of the European Statistical System.
The Code of Practice is based on 16 principles that concern statistical authorities' independence, accountability and the quality of the processes and data to be published.
The principles are in line with the Fundamental Principles of Official Statistics approved by the United Nations Statistics Commission and are supplementary to them. The quality criteria of Official Statistics of Finland are compatible with the European Statistics Code of Practice.
Further information: European Statistics Code of Practice | Statistics Finland and Recommendations of the Advisory Board of Official Statistics of Finland | Statistics Finland
Data revision - policy (SIMS 17.1)
Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.
The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.
Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.
Timeliness (SIMS 14.1)
The indices are calculated quarterly. They are published as preliminary data on the home page of the statistics after the completion of the index of wage and salary earnings approximately seven weeks after the end of the reference quarter. The indices remain preliminary until the data of the index of wage and salary earnings are final. The final data are published in connection with the release for the second quarter of the year following the reference year.
Punctuality (SIMS 14.2)
The data are published according to the release calendar.
Comparability - geographical (SIMS 15.1)
The price index of public expenditure describes price developments in public sector expenditure only in Finland.
Comparability - over time (SIMS 15.2)
Changes have been made in the classification and contents of the index in connection with the base-year renewals. Therefore, the index is not fully comparable over time.
Long-term index series are available from 1975 onwards on the home page of the statistics for some main categories. The point figures of the old indices have been extended (chain-linked) to correspond with the changes in the latest price index of public expenditure.
Coherence – cross domain (SIMS 15.3)
The price index of public expenditure is not directly comparable with other statistics.
Coherence - internal (SIMS 15.4)
The baseline value data used in the index weight structure may be from a period other than the base year. Such differences are explained in the methodological description for each year.
Release calendar (SIMS 8.1)
Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data become public after they have been updated in the web service.
Further information: Publication principles for statistics at Statistics Finland
Release calendar access (SIMS 8.2)
Statistics Finland's release calendar Future publications
Future publications of the statistics can be found on the page of the statistics at: Future publications of the statistics
User access (SIMS 8.3)
The data are released to all users at the same time. Statistical data may be processed at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.
Further information: Publication principles for statistics
Unless otherwise specifically stated in connection with the product, data or service concerned, Statistics Finland is the producer and copyright owner of the data. The terms of use for statistical data.
Frequency of dissemination (SIMS 9)
The indices are published quarterly and remain preliminary until the release for the second quarter of the following year, i.e. until the data of the index of wage and salary earnings are final.
News release (SIMS 10.1)
The release is published monthly/annually/quarterly on the home page of the statistics.
Online database (SIMS 10.3)
The database tables of the statistics can be found in the StatFin database.
Confidentiality - policy (SIMS 7.1)
The data protection of data collected for statistical purposes is guaranteed. The compilation of statistics is guided by the Statistics Act. Alongside the Statistics Act, the EU’s General Data Protection Regulation and the Finnish Data Protection Act are applied to the processing of personal data. Provisions on the confidentiality of data collected for statistical purposes are laid down in the Act on the Openness of Government Activities.
The data are processed only by persons who need the data in their work. The use of data is restricted by usage rights. All persons employed by Statistics Finland have signed a pledge of secrecy, where they have obliged to keep secret the data prescribed as confidential by virtue of the Statistics Act or the Act on the Openness of Government Activities.
Further information: Data protection | Statistics Finland (stat.fi)
Confidentiality - data treatment (SIMS 7.2)
The data protection of data collected for statistical purposes is absolutely guaranteed in accordance with the Statistics Act (280/2004), the Personal Data Act (532/1999) and the Act on the Openness of Government Activities (621/1999), as well as the requirements of the EU’s General Data Protection Regulation (2016/679).
The weight structure of the price indices of public expenditure is calculated on the basis of publicly available open data. Several other index series are also used in the calculation of the index, which are also publicly available.