THE COST OF LIVING.

New Zealand Herald, Volume LXVII, Issue 20744, 11 December 1930, Page 17

THE COST OF LIVING.

NEW BASIS OF COMPUTATION*

ANALYSIS OF EXPENDITURE. DATA FROM DOMESTIC BUDGETS* [BY TELEGRAPH. —OWN CORRESPONDENT.] WELLINGTON. Wednesday. The retail price index numbers published by the Census and Statistics Office are on a pre-war base, the weights used in combining the index numbers for the various groups of expenditure in order to obtain "all groups" indices being taken from the results of a household budget inquiry by the Labour Department in 1910-11. For some time past, the question of revising these index numbers on a post-war base has been under consider- ■ ation, and it has been decided to adopt the year 1930 as a base in future compilations. This particular year was. selected at the instigation of the International Labour Office which urged all statisticians compiling index numbers of retail prices in the various countries to adopt a common base so that comparisons may be more readily made. In order to enable this work to be carried out, ifc was necessary, to make a collection of household budgets so that the distribution of expenditure in the average family might ba ascertained. Expenditure on Food. The Abstract of Statistics just issued gives some interesting particulars of the distribution of expenditure by the average family. Food is shown to account for 29.52 per cent, of the total expenditure; housing, 21.93 per cent.j clothing, drapery and footwear, 12.61 per cent.; fuel and lighting, 6.17 per cent.; miscellaneous items, 29.77 per cent. These figures are based on an examination of 318 household budgets. Although it was hoped that a larger number of completed account books would be returned, the result compares very favourably with two previous budget collections made in this country. Of the 29.52 per cent, of expenditure accounted for by food, the following wera the more important individual items:— Bread, 3.23; flour, 0.87; meat, 5.62; bacon and ham, 0.90; milk, 3.57; butter, 3.57; sugar, 1.14; tea, coffee and cocoa, 1.33; fresh vegetables and fruit, 3.45; other foods, 5.84. Clothing and drapery accounted for 9.77 per cent, of the total expenditure; boots and shoes, 2.84; fuel and light, 6.17; insurance, 3.78; fares, 3.46; superannuation, 2.40; medical expenses, 2.38; sports and amusements, 2.20; papers, books and postage, 1.62; furnishings, 1.55; tobacco, 1.30; household cleaning supplies, 1.09; other miscellaneous items, 9.59. This grouping shows that the proportion of expenditure on food is higher in large households than that in those of smaller size, the proportion increasing from 24.9 per cent, in households of two members to 37.4 per cent, ia households of seven members or more. Housing, Fuel and Light. As would be expected the proportionate expenditure on housing shows a progressive decline as the membership of the household increases. The proportion of expenditure on fuel and light is practically constant for households of all sizes, varying between 6.0 and 6.3 per cent, of total expenditure. The percentage of expenditure on miscellaneous items shows a definite decrease in the larger households. The results of this budget collection show that the proportion of expenditure on 3 food steadily decreases as the total in- . como of the family increases. The propori tion spent on housing is greatest in tha lowest income group and lowest in tha ' highest income group into which inves- * tigation was made. The groups between 1 £6 and £7 a week, however, show increases as compared with the immediately preceding groups. Expenditure on clothr ing, drapery and footwear is higher pro- » portionately in the higher income groups ■ than in the lower income groups. Fuel and lighting are responsible for between 5.5 and 7.6 per cent, of the total expenditure, the highest figure being recorded in the case of incomes of between £4 and £4 10s a week, while successive decreases in the proportion spent on this item are shown to have occurred as the income increases beyond £4 10s per week.

Similar investigations of household expenditure were made in 1910-11 and 1919. Only 69 "budgets" were deemed of any practical use in the first investigation; in 1919 the number used was 109; ifc is now increased tp 318. There are approximately 300,000 households in New Zealand. Following is a summary of the results of the successive investigations, showing the proportions of expenditure under various headings:— 1910-11. 1919. 1930. Housing r.-. p. 20.31 13.07 21.93 Food .v 34.13 35.32 29.52 Clothing .. 13.89 15.86 12.61 Fuel and Tight .. 5.22 '6.10 6.17 Other items— Tobacco r.v k. 1.05 1.07 1.30 Fares ... 2.82 2.67 3.4S Insurance .-.i t. .■ 2.47 2.93 3.78 Sports va 1.62 1.79 2.20 Other items .v 18.49 18.19 19.03 In 1910-11 and 1919 the expenditure on the first, four items totalled 73.55 and 73.35 per cent, respectively of the total.The latest figures show a. reduction to 70.23 per cent., leaving a higher proportion of expenditure on other items. . The discrepancy between the housing figures for 1911 and 1919 was officially explained to be due to the fact that in the former only households actually paying rent were included, whereas in 1919 allowance was also made for households where the occupier had acquired or was in process of acquiring the freehold.-