COMPARATIVE TEST

Evening Post, Volume CXII, Issue 3, 3 July 1926, Page 11

COMPARATIVE TEST

DOMINION PRICES LOWER

AUSTRALIA, CANADA, AND U.S.A. DEABEE. :

The following is taken from the ''Abstract of Statistics" for June, issued by the Census and Statistics Office1: — "International comparisons of percentago increases in prices over prewar levels should be made only with the utmost caution and diffidence, by reason of diversity among the sources of the price-quotations utilised, of variations in the selection and grouping of commodities, in the base-periods, and in methods of combining pricequotations adopted in the compilation of tho price-indexes, as well as of the fact that in the base-periods priceTevels were by no means identical in all countries." But tho last-mentioned difficulty may be overcome, the Government Statistician proceeds to explain, by talcing certain figures in his standing table of prices, and by adding thereto 100, dividing this sum by the sum of 100 and tho figure representing the percentage increase of present-day over July, 1914, prices in New Zealand; land finally multiplying the quotient so arrived at by the following factors: — Australia (food only), 105.5; Australia (all groups), 107.G; Canada (food only), 12a; South Africa (food only), 141; United States (food only), 129. "Tho resulting figures diminished by 100 represent the percentages by which price-levels in the countries coiii cerned exceed price-levels in New Zealand at tho present day. The above factors have been arrived at as a result of comparisons recently made between the prices of selected samples of foodstuffs in New Zealand and the prices of the same foodstuffs in Canada (30), in South Africa (33), and in the United States (22 articles). Using the weights used in the compilation of the Now Zealand index number of foodprices, the prices of these items were found to have been, in February, 1926, 27 per cent, higher in Canada, 8 per cent, higher in South Africa, and 41 per cent, higher in the United States, than in New Zealand. It was ascertained that substitution for the Now Zealand weights of tho weights used by the other countries concerned in the compilation of their respective index numbers mado no material difference in the result. Admittedly the samples are small; but, including as they do the most important items in the 'regimens' (or list of commodities included in. the. index numbers) of the countries concerned, they may be regarded as giving a satisfactory indication of relative food prices."