The information requested falls within the responsibility of the National Statistician, who has been asked to reply.
Letter from the Director of Macroeconomics and Labour Market, Colin Mowl, dated 14 September 2006.
The National Statistician has been asked to reply to your recent Parliamentary Question (HL7275) asking what is the estimated increase in the cost of living over the past one, three and five years for United Kingdom households with incomes in the lowest quintile. I am replying in her absence.
Information in the form requested is not readily available. Calculation of weights for households with incomes in the lowest quintile for the retail prices index (RPI) would require special calculations using data from the Office for National Statistics' expenditure and food survey, from which the RPI weights are derived. Specifically, the process would involve returning to each year's survey at the household level and removing all observations from respondents above the lowest quintile. The remaining responses would then need to be aggregated to national levels before embarking on the detailed process of producing RPI expenditure weights. The removal of such a large amount of the responses means that it is likely that a number of years would need to be averaged to provide an acceptable sample size. Special calculations would also be required to derive the weights for certain housing components whose weights are modelled (that is, mortgage interest payments and depreciation costs). Taken together, this means that the Question can be answered only at disproportionate cost.
Consumer prices index (CPI) weights are derived from whole economy estimates of household expenditure taken from the national accounts. The source data come from a variety of sources, including non-household surveys, and are therefore not amenable to the calculation of weights for households with incomes in the lowest quintile.