Price index of public expenditure: documentation of statistics

The price index of public expenditure measures the development of prices in the expenditure of central and local (municipalities and joint municipal authorities) governments. The indices have been used in decision-making about central and local government finances and municipalities and in various studies. The indices are suitable for calculations at constant prices, as well as for estimations of volume changes in the public economy and expenditure. The base year of the index is 2015, indicated by the figure 100. With central government, the weight structure follows the structure of expenditure in the financial statements for 2014, and with municipalities and joint municipal authorities, it follows the structure of expenditure in the financial statements for 2015.

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.

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.

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.

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.

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.

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.

The price index of public expenditure covers central and local government finances and the finances of joint municipal authorities.

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.

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.

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.

The data are published according to the release calendar.

The price index of public expenditure describes price developments in public sector expenditure only in Finland.

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.

The price index of public expenditure is not directly comparable with other statistics.

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.

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.

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.

Depending on the source data, data are collected monthly, quarterly or annually. In general, the frequency of the data collection is quarterly.

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.

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.

Economic Statistics

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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.

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The data are published monthly on the home page of the statistics as StatFin database tables.

Statistical data are published as database tables in the StatFin database. The database is the primary publishing site of data, and new data are updated first there. When releasing statistical data, existing database tables can be updated with new data or completely new database tables can be published.   

In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases. 

Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.   

Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service. 

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.

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Further information: Publication principles for statistics 

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