GOST OF LIVING

New Zealand Times, Volume XLVI, Issue 10560, 10 April 1920, Page 7

GOST OF LIVING

OFFICIAL INDEX FIGURE HOIW IT IS ARRIVED AT. Tho attention of Mr J. Butcher Act-ing-Government Statistician, was called by a "Times’’ representative yesterday to recent criticisms of the official statisticts with ...regard to the cost of living, and Mr Butcher was asked to explain the method by which the cost of living index figure is arrived nr. ‘‘Practically,” said Mr Butcher, "the critics say that we get our. figures from tho tradespeople, and they supply us with any old price, preferably a price jvt which they sell some of their things but not the bulk of them, and we acget it without any questions asked. Wo are practically accused of accepting just what is sent to us. and making no inquiries about it. Tho first thing wo do is to collect tho information as to retail prices. That information may be collected, as is suggested, from people who are likely to be biased in the direction of allowing the jncrease ‘to be a tittle lower than it actually is; but, personally, I have my doubts as to the retailers being this biased. Wo tell them that the particulars furnished will ‘be regarded as strictly confidential, and will be used only for general statistical purposes. That is we do not publish any individual return. To find the index figure, we average oat from a number of returns, ranging, m tho caso of grocers, from six in each of the four chief centres to two in some of the less important towns. Of em.-se the men we get tho returns from t-ro the lending men in each town. PENALTY FOR FALSE INFORMATION. “Incidentally, I may state, these joturns are required by law. There is a penalty for giving ‘false information pr for refusal to supply information. Wo say to retailers, ‘Tne prices to be quoted are the cash prices of that grade or quality most frequently sold to the masses of the community.'’ There is a specific instruction. It is not likely that the grocers generally “ignore that instruction, though nn odd one might. With tht exception of a few comm-cdities, such as bacon and tea, the groceries the prices of which are collected by u» are pratically of the <no grade and give little or no latitude for quoting a price qt which small sales may be made but which may not he the predominant price. In the case of biscuits, for example, we specify water biscuits and super-wine, and there are practically no different grades in these. The only lines that T would be inclined to give in on that point are bacon and tea; and, incidentally’, those are the lines we have been criticised on most. I have looked into, this matter more than once, and I find that,-even If the price of bacon or tea was shown as 3d a pound too little by every grocer in the Dominion, that would hot affect the index number to any appreciable extent.

NOT 6d A WEEK DIFFERENCE. “Ii probably would not ninko a difference of 6d, a week in a wage in* crease based on the cost of living index figures, seeing that all the other items are to all intents and purposes impossible of- manipulation -in that tray. All the grocery' lines are averaged out; and we not only average them, but wo weigh them, giving every item its relative importance in the household budget. Bread, for instance, is the most important of the lot; and wo get tho prices of bread, as well as of a number of other important items, direct from tho inspector of factories, who cannot possibly be accused of bias in the direction suggested. A DOUBLE CHECK.

It has been alleged that these returns are not checked, but they are collected by the inspector of factories from tho grocer.. The inspector has full power to check them as far as hu can, and they are checked hero by ua as far as we can. So they arc really subject to a double check. At the same time, however, neither the Government Statistician nor anybody else,' except ths shopkeeper, is iu a position to say what is the price at which ho sells the bulk of his goods. Wo have made inquiries at different times and queried returns where it appealed necessary, and have usually found that tho returns aa supplied are quit* correct. So far na we can tell, the grocers are suoplying correct returns. HOUSE RENTS. “About house rents in Wellington,.’ said our reporter. “A rental of 19a dd a week certainly seems low for m fiveroomed house.’ “It does," replied Mr Butcher. ‘‘but, then, you must remember that if you take' five-roomed houses in Wellington the big proportion of thorn are in districts such as To Aro flat, where, probably, owing to the lack of convenience*, ®to. ( the bulk of *bo people will not be paying £1 a week in rent. Those who criticise the «ta-, tistician’s figures are probably people who have newly gone into a place ana bad to pay considerably higher rents than the statistician shows; but » must bo recollected that tho jeuw quoted hero are from all houses, some of which may have been in possession if one family for 10, 16, or SO year* with very little increase of rent. In each of tho 25 towns wo deal with wo get information from alt tho •°d -, a (.gents of any importance as to tho rents collected. METHODS ADOPTED.

«Wo don’t ask the agent for the average rent charged, but a, statement •bowing the number of houeo» lor vhich no collects rent in a certain week, and the total rental he has collected from those houaoa for tho week. And thus what we #how are the actual average rents now being paid. We collect over 400 rent returns, covering some 12,000 houses; and any errors therefore, are hound ho averaged ov.t ond cannot affect the general ro*U“tt »S »ald that they defy Mr Fraser to rent a five-roomed bouse at £1 a week in Wellington; and they may bo right that a new tenant could not get a house at that rental because rents are rising. But many of tho houses from which returns ore collected have had the ©am© family in occupation for 10, 15, or 20 years, or even more,and tho family is continuing to pay the same rent, or only a little more. Again, in many cases, the general rise in tho price of property is counter-balanced by the deterioration in the house itself. Another point is that the better class of houses in Wellington are usually owned by the people living in them. Those for which rents are being collected are, ns a rule, of the poorer class."