CNMI Consumer Price Index: TINIAN - Department of Commerce – Commonwealth of the Northern Mariana Islands (CNMI)

Explanatory NotesQuarterly InflationAnnual InflationFurther Analysis of the IndexAppendix

CPI Construction and Methodology

Survey Overview

Over a 3-month period from October to December 2005, the Central Statistics Division (CSD) of the Commonwealth of the Northern Mariana Islands’ Department of Commerce conducted a Household Income and Expenditure Survey (HIES). This survey used two types of survey methods to gather data. For the more expensive and less frequently purchased items, such as major appliances, electronic goods, new and used vehicles, etc., a pre-printed, survey questionnaire was completed by an interviewer. For those items which are more frequently purchased, such as food, tobacco, drinks, etc., the household respondent was given a diary to record all purchases during a one-week period.

Household Sample

A random sample of 1,200 households was selected for the HIES in Saipan, which is the capital and the most populated island in the CNMI and about 125 households were selected from each of the islands of Rota and Tinian. From that initial sample, 1,141 households completed the survey questionnaire. From those households, a sub-sample of 700 households was given a diary to record household purchases.

Selection of the Item Sample

In December of 2007, Justin H. Andrew of CSD and Dr. Michael J. Levin, from Harvard University processed the data. Assisting them in 2008 were Mr. Wil Maui of DataTalks and Mr. Brian Hannon, an Economic Statistics International Consultant was hired to assist the CSD in rebasing the CPI. The survey items and expenditures were arrayed using the U.S. Bureau of Labor Statistics CPI classification system as a frame of reference. Then, using a statistical technique called “Probability Proportional to Size”; the CSD selected a new item sample. Using the PPS technique to select the item sample ensured that those items with the highest monthly household expenditures were selected in the sample. The sample included a total of 161 items for Saipan, 147 for Tinian, and 129 for Rota.

Expanding the Major Groups

Using the BLS Classification System as a frame of reference allowed the CSD to expand the number of groups included in the CNMI’s CPI. Instead of having five (5) major groups, the revised CPI now has nine (9) major groups. Having more groups allows the users to understand better which groups are responsible for the increases/decreases of the CPI. In the previous CPI, for example, alcoholic beverages were a part of the Health and Recreation Group. Now, it is one of the 4 new groups. The others are: Medical Care, Education and Communication and Other Goods and Services.

Expansion of the Outlet Sample

The previous CPI collected price data from 18 different outlets. In the revised CPI, the number of retail outlets has been expanded dramatically and the outlet sample now consists of roughly 170 different retail outlets in Saipan, 30 in Tinian and 60 in Rota, which are geographically dispersed throughout Saipan, Rota and Tinian. This substantially larger outlet sample will ensure that the retail price data are collected from a wide variety of outlets dispersed throughout the three locations.

Data Collection and Price Review Manual

The CSD has made another enhancement to the CPI by increasing the data collection training and by formalizing this vital aspect of price collection by developing a Data Collection Manual. This new manual covers virtually all aspects of price collection ranging from initiating the retail outlet to the rules for selecting a retail item and re-pricing. This new manual will improve data collection quality because it will provide guidance to the data collectors in handling almost any type of re-pricing situation.

Linking the Old and New CPIs

In the 4thQuarter of 2008, data collectors collected price data for both the old and revised CPIs and the two indexes were “spliced” together at that point. In order for two indexes to be linked together, there must be at least one period where prices are collected for both the old and the new indexes. This overlapping period was the 4th Quarter 2008. Beginning in the 1stQuarter 2009, the CSD collected price data for only the items in the revised CPI. Therefore, up to the 4th Quarter 2008, the index change is based on the old basket of goods, whereas from 1st Quarter 2009 onwards, the index change is based on the new basket.

Changing the Base Period

Another change in the CPI was rebasing it from the 1stQuarter 2003 = 100 to the 4thQuarter 2008 = 100. This is a mathematical change in the CPI but the more recent base period will make the CPI easier for users to understand. There is no difference in the percent changes from the old CPI from one period to another.

Calculationg the Consumer Price Index

As with most CPIs around the world, the CSD will continue to use the Laspeyres method to calculate the CPI. This is the most widely-used and internationally-accepted method of calculating price change for a CPI. The Laspeyres formula is shown below:
Laspeyres Formula:

This method of index computation uses the quantities of commodities purchased in the base period as the basis for computing the value of the “market basket.” First, there are n number of items in the market basket with each having a base quantity. Each of these items has a base price, p0 and current price, pi. Multiplying p0 with q0 gives the total expenditure for a particular commodity for the base period. Current expenditure for an item is obtained by multiplying pi with q0. The sum of current expenditures for all items in the market basket is expressed as ? piq0, while the sum ?p0q0 is the total market basket expenditures in the base period. Notice that in both summations the term q0 remains constant, which means by using the same quantities only price changes are reflected in two pricing periods.

For those unfamiliar with statistical notation, trying to read and understand the above explanation can be an intimidating experience. In layman’s terms, the above simply means that all of the items in the CPI are priced every quarter and the prices for each item in the current quarter are compared to the same prices in the base period. The base period is the 4thquarter 2008 when the CPI was set equal to 100. That is when the CPIs for each of the 9 major groups and the All Items = 100.

The CSD uses a slight variation to this formula. Each quarter, the average of the prices that are collected for each item are compared to the average of the same prices in the previous quarter – not the base period. This is only done for items which are priced in both quarters. The average of the prices of an item in the current quarter is divided by the average of the prices in the previous quarter to calculate a price relative. This price relative is multiplied by the item’s weight in the previous quarter to update the item’s weight in the current quarter. This product is then divided by the item’s weight in the base period to calculate an item’s CPI. By summing the updated weights for all of the items in a group and dividing that sum by the same weights in the base period will calculate the group’s current CPI.

Section 1: Quarterly Inflation

Table 4 below shows the quarterly inflation rate for each quarter since the 2ndquarter 2010, by group.
As can be seen from this table the index increased by 0.7 percent for the 1st quarter 2017.
The trend for “All Items” can also be seen in Chart 6 on the following page, illustrating fluctuating change in the quarterly price change over the last 6 years.
Chart 7 shows “Housing & Utilities” group had an increase of 2.6 percent followed closely by “Transportation” group (2.1 percent), while “Apparel” group showed the largest decrease of 5.0 percent. All other groups showed negligible changes.

CNMI CPI Table4: Quarterly Inflation, by Group, Tinian

		All Items	Food	Alcoholic Beverages	Housing & Utilities	Apparel	Transportation	Medical Care	Recreation	Education & Communication	Other Goods & Services
											Source: CNMI Consumer Price Index
2017	2nd Qtr	0.8	-0.3	0.0	-1.0	4.4	0.0	0.0	18.0	0.7	0.0
2017	1st Qtr	0.7	0.3	0.0	2.6	-5.0	2.1	0.0	0.8	0.0	0.3
2016	4th Qtr	-0.2	0.1	0.1	1.3	0.0	0.5	0.0	-0.3	0.0	-7.1
2016	3rd Qtr	0.2	0.8	-0.1	-0.6	0.0	2.2	0.0	0.2	0.0	0.8
2016	2nd Qtr	1.5	-0.1	0.0	5.4	0.0	0.0	0.0	0.0	0.0	0.0
2016	1st Qtr	-1.0	0.9	0.0	-5.4	-0.1	-2.8	0.0	14.8	0.0	0.4
2015	4th Qtr	-0.2	0.0	0.0	-0.5	0.1	-0.2	0.0	0.0	0.0	-0.4
2015	3rd Qtr	-1.9	0.1	0.0	-5.3	-0.2	-4.0	0.0	-0.1	0.0	-0.1
2015	2nd Qtr	1.4	0.6	0.0	3.8	0.0	1.4	0.0	-1.1	0.0	0.1
2015	1st Qtr	-3.4	1.6	0.0	-10.2	2.4	-5.2	-0.7	0.4	-2.0	0.4
2014	4th Qtr	-1.4	0.3	0.0	-5.0	0.0	-5.2	0.0	0.0	-0.3	9.9
2014	3rd Qtr	0.6	4.0	0.0	-1.6	2.0	2.7	0.0	-0.2	0.1	0.4
2014	2nd Qtr	1.0	1.3	2.2	2.0	0.0	0.0	0.0	0.5	0.0	0.3
2014	1st Qtr	-0.3	0.3	1.8	-1.5	2.2	0.0	-0.1	-1.3	-0.7	0.3
2013	4th Qtr	0.1	0.1	0.0	0.2	0.0	0.0	0.0	0.0	0.4	0.0
2013	3rd Qtr	-1.4	0.2	0.3	-0.3	-0.6	0.5	-9.2	-0.8	0.3	-0.4
2013	2nd Qtr	0.1	1.9	0.0	-0.4	-1.8	0.0	0.0	2.2	0.3	-0.8
2013	1st Qtr	0.4	0.2	-0.2	1.2	-0.9	-0.4	0.3	0.5	-3.2	1.7
2012	4th Qtr	3.0	0.4	2.1	2.6	-1.8	-0.3	15.2	-0.5	3.3	0.6
2012	3rd Qtr	-0.3	-0.2	-0.9	-0.4	-1.8	1.6	0.0	-1.1	-0.3	-0.5
2012	2nd Qtr	0.3	0.9	2.9	-0.7	-0.9	3.1	0.0	-0.6	0.0	2.1
2012	1st Qtr	2.3	0.7	0.1	7.1	-0.1	-0.6	-2.0	3.9	0.7	-0.3
2011	4th Qtr	0.3	2.2	0.1	-1.0	-0.2	-0.6	1.4	0.0	0.0	0.7
2011	3rd Qtr	3.5	1.2	0.1	3.8	0.3	1.6	13.0	7.3	0.0	0.3
2011	2nd Qtr	0.6	0.0	0.0	0.0	-0.8	8.2	0.0	-0.2	-0.2	0.0
2011	1st Qtr	0.9	-1.2	1.9	2.1	-0.9	3.4	0.0	-0.7	0.2	2.4
2010	4th Qtr	3.3	-1.3	-2.0	4.9	-0.3	-0.4	19.5	-0.4	-0.6	1.1
2010	3rd Qtr	-0.3	-0.2	0.0	-0.9	0.3	0.7	0.0	0.0	-0.3	0.0
2010	2nd Qtr	1.3	-1.1	2.1	5.2	-4.0	1.1	0.0	-0.3	0.5	1.6

To download, right click on the chart and select “Save Image As”…
CNMI CPI Chart6 2017

CNMI CPI Chart7 2017

Section 2: Annual Inflation

Table 5 below shows the annual inflation for Tinian for the last 5 years ending 1st quarter, 2017.
As can be seen from the table, there was an increase in the annual inflation for All Items in 1st quarter 2017.
Chart 9 shows additional annual inflation analysis by group for the 1st quarter 2017.
From this graph it can be seen that “Housing & Utilities” group had the highest annual increase of 8.8 percent over the last 12 months.

CNMI CPI Table5: Annual Inflation, by Group, Tinian

		All Items	Food	Alcoholic Beverages	Housing & Utilities	Apparel	Transportation	Medical Care	Recreation	Education & Communication	Other Goods & Services
											Source: CNMI Consumer Price Index
2017	1st Qtr	2.2	1.0	0.0	8.8	-5.0	4.9	0.0	0.7	0.0	-6.1
2016	1st Qtr	-1.8	1.6	0.0	-7.5	-0.2	-5.5	0.0	13.4	0.1	0.0
2015	1st Qtr	-3.1	7.3	2.2	-14.4	4.5	-7.8	-0.7	0.7	-2.3	11.1
2014	1st Qtr	-1.5	2.4	2.1	-1.9	-0.2	0.5	-9.2	0.0	0.2	-0.9
2013	1st Qtr	3.4	1.3	3.9	2.7	-5.3	3.9	15.6	-1.7	-0.3	4.0
2012	1st Qtr	6.8	4.1	0.3	10.0	-0.8	8.6	12.3	11.2	0.5	0.6
2011	1st Qtr	5.4	-3.7	2.0	11.8	-4.9	4.9	19.5	-1.5	-0.2	5.1

To download, right click on the chart and select “Save Image As”…
CNMI CPI Chart8 2017

CNMI CPI Chart9 2017

Section 3: Further Analysis of the Index

Table 6 and Chart 10 below show the change in the index since the CPI was established in 1st Quarter 2010.
The analysis shows ”Medical Care” has had the most significant increase in this period with the index rising by about 40 percent during this period, while “Recreation” was next largest with an increase of 22 percent during this time.

CNMI CPI Table6: Consumer Price Index, by Group, Tinian

		All Items	Food	Alcoholic Beverages	Housing & Utilities	Apparel	Transportation	Medical Care	Recreation	Education & Communication	Other Goods & Services
											Source: CNMI Consumer Price Index
2017	2nd Qtr	112.2	114.2	110.9	105.6	92.3	108.7	139.8	146.3	98.7	113.8
2017	1st Qtr	111.4	114.6	110.9	106.8	88.3	108.7	139.8	123.9	98.0	113.8
2016	4th Qtr	110.7	114.3	110.9	104.1	93.0	106.5	139.8	122.9	98.0	113.4
2016	3rd Qtr	110.9	114.3	110.8	102.8	93.0	105.9	139.8	123.3	98.0	122.1
2016	2nd Qtr	110.6	113.4	110.9	103.4	93.0	103.7	139.8	123.0	98.0	121.1
2016	1st Qtr	109.0	113.5	110.9	98.1	93.0	103.7	139.8	123.0	98.0	121.1
2015	4th Qtr	110.1	112.5	110.9	103.8	93.1	106.6	139.8	107.2	98.0	120.7
2015	3rd Qtr	110.3	112.5	110.9	104.3	93.0	106.9	139.8	107.2	98.0	121.1
2015	2nd Qtr	112.5	112.4	110.9	110.1	93.2	111.3	139.8	107.3	98.0	121.3
2015	1st Qtr	111.0	111.7	110.9	106.0	93.2	109.7	139.8	108.5	98.0	121.1
2014	4th Qtr	114.8	109.9	110.9	118.1	91.0	115.8	140.8	108.1	100.0	120.7
2014	3rd Qtr	116.4	109.6	110.9	124.4	91.0	122.2	140.8	108.1	100.3	109.8
2014	2nd Qtr	115.7	105.3	110.9	126.4	89.2	119.0	140.8	108.3	100.2	109.4
2014	1st Qtr	114.6	104.0	108.5	123.9	89.2	119.0	140.8	107.8	100.2	109.0
2013	4th Qtr	114.9	103.8	106.5	125.7	87.2	119.0	140.9	109.2	101.0	108.7
2013	3rd Qtr	114.8	103.7	106.5	125.4	87.2	119.0	140.9	109.2	100.6	108.7
2013	2nd Qtr	116.5	103.5	106.2	125.7	87.8	118.4	155.1	110.2	100.3	109.2
2013	1st Qtr	116.3	101.6	106.2	126.3	89.4	118.4	155.1	107.8	100.1	110.0
2012	4th Qtr	115.9	101.4	106.5	124.8	90.2	119.0	154.6	107.2	103.3	108.2
2012	3rd Qtr	112.5	101.0	104.2	121.6	91.8	119.3	134.2	107.7	100.0	107.6
2012	2nd Qtr	112.8	101.2	105.2	122.1	93.6	117.5	134.2	108.9	100.3	108.1
2012	1st Qtr	112.5	100.3	102.3	123.0	94.4	114.0	134.2	109.6	100.3	105.8
2011	4th Qtr	110.0	99.6	102.2	114.9	94.4	114.6	137.0	105.5	99.7	106.2
2011	3rd Qtr	109.7	97.5	102.1	116.0	94.6	115.3	135.0	105.5	99.7	105.5
2011	2nd Qtr	106.0	96.3	102.0	111.8	94.4	113.5	119.5	98.3	99.6	105.1
2011	1st Qtr	105.4	96.3	102.0	111.8	95.1	104.9	119.5	98.5	99.8	105.1
2010	4th Qtr	104.4	97.5	100.1	109.4	96.0	101.5	119.5	99.2	99.6	102.7
2010	3rd Qtr	101.1	98.7	102.1	104.3	96.3	101.8	100.0	99.6	100.2	101.6
2010	2nd Qtr	101.3	98.9	102.1	105.2	96.0	101.1	100.0	99.7	100.5	101.6
2010	1st Qtr	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0

To download, right click on the chart and select “Save Image As”…
CNMI CPI Chart10 2017

CNMI CPI Appendix 3 – CPI Weights for each Islands

		Saipan	Tinian	Rota
				Source: CNMI Consumer Price Index
Food	All Food	17.1083	21.0482	12.9058
Food	Cereal Products	2.7052	4.6227	2.6345
Food	Meat Products	4.0402	6.0270	3.1488
Food	Seafood Produce	1.4994	0.8986	N/A
Food	Dairy Produce	1.5335	2.0349	1.4826
Food	Fruit	0.3195	0.5851	0.0762
Food	Vegetables	1.0487	1.1897	0.9914
Food	Non-alcoholic Beverages	1.6493	2.8072	1.5779
Food	Confectionery	0.3072	0.2004	0.2269
Food	Miscellaneous Food	0.5690	1.2973	0.5522
Food	Take-away Food	3.4363	1.3853	2.2153
Alcoholic Beverages	Alcoholic Beverages	1.3768	3.1933	1.5890
Housing & Utilities	All Housing & Utilities	30.3859	31.1513	44.6249
Housing & Utilities	Housing	15.1278	7.8888	13.7889
Housing & Utilities	Utilities	10.0594	12.0407	14.5987
Housing & Utilities	Household Goods/Furniture	1.0887	5.3456	2.0813
Housing & Utilities	Household Maintenance	4.1101	5.8762	14.1559
Apparel	All Apparel	6.1443	8.7016	7.8026
Apparel	Mens Clothng	1.7022	2.9283	1.5850
Apparel	Womens Clothing	2.0195	3.0038	2.4739
Apparel	Infant Clothing	0.6881	0.5074	0.7567
Apparel	Footwear	1.2561	1.8681	2.5288
Apparel	Accessories	0.4783	0.3942	0.4582
Transportation	All Transportation	22.2282	7.9752	10.3137
Transportation	Vehicle Purchase	13.8896	0.4586	2.1391
Transportation	Vehicle Maintenance	7.2386	5.3267	7.6918
Transportation	Public Transport	1.1000	2.1900	0.4827
Medical Care	All Medical Care	10.6622	10.8923	9.3760
Medical Care	Medical Supplies	1.2291	1.3909	2.3924
Medical Care	Medical Services	9.4330	9.5014	6.9836
Recreation	Recreation	3.3994	4.0032	2.2680
Education & Communication	Education & Communication	5.6292	5.7111	2.9257
Education & Communication	Education	0.6395	0.6188	0.4815
Education & Communication	Communication	4.9897	5.0923	2.4442
Other Goods & Services	All Other Goods & Services	3.0656	7.3237	8.1944
Other Goods & Services	Cigarettes & BetelNut	1.7380	2.6558	4.1746
Other Goods & Services	Other Goods	0.5353	0.4458	0.3478
Other Goods & Services	Other Services	0.7923	4.2221	3.6719