What is the personal inflation calculator?
The personal inflation calculator is a tool that can be used by Lithuanian residents to calculate their personal inflation rates. One has to enter the data on their average monthly consumption expenditure by allocating it to certain groups of goods and services. Having done that, the calculator automatically determines the personal inflation rate.
What type of price changes does the personal inflation calculator show?
The personal inflation calculator shows price developments compared to the data of the previous year, e.g. if the calculator shows that food inflation in July 2019 was 4.6%, it means that food prices in July 2019 were 4.6% higher compared to those recorded in July 2018.
Why does my personal inflation rate differ from Lithuania’s inflation rate provided by Statistics Lithuania?
We all allocate our consumption expenditures differently. Moreover, prices of different goods and services develop unevenly. This implies that changes in the overall price of goods and services consumed by Lithuanian residents vary. As a result, their personal inflation rates differ as well.
The country’s inflation rate differs from personal inflation estimates because it reflects price developments of the average consumption basket in Lithuania.
What data does the calculator use?
In order to estimate personal inflation, the calculator needs the following data:
- the average monthly amount spent by the individual on goods and services (this data has to be entered by users themselves).
- data on the developments of prices of goods and services purchased by the individual (the calculator takes this data from the database of Statistics Lithuania).
Is the entered data on my consumption expenditure stored?
Data on your consumption expenditure is not stored anywhere. The calculator uses only newly entered data. If you delete any of your entered numbers, the calculator will not “remember” them.
However, the calculator provides an opportunity to save the data on your consumption expenditure. If you decide to save it, you will be able to easily upload it later.
How frequently is the data provided on the webpage of the personal inflation calculator updated?
The data provided on the webpage of the personal inflation calculator is downloaded from the database of Statistics Lithuania. Therefore, the frequency of its updates depends on Statistics Lithuania which updates inflation data on the 10th day of every month;
How is personal inflation calculated?
The personal inflation estimate is a number that summarises the change in prices of all goods and services consumed by one Lithuanian resident. If an individual tends to purchase more goods and services whose prices rise more rapidly, their personal inflation rate is respectively higher compared to those purchasing more goods and services experiencing the opposite trends.
In mathematical terminology, personal inflation is defined as a weighted average of price changes of all goods and services consumed by one person. Its weights are equalled to shares of expenditure on different consumption groups.
Does the personal inflation calculator provide a perfectly accurate personal inflation estimate?
The calculator provides one of the most accurate personal inflation estimates, yet it should be noted that personal inflation could be calculated ideally accurately only if one has the following data:
- the current prices of every single good or service purchased;
- the previous year’s prices of every single good or service purchased;
- the monthly amount spent on every single good or service.
Therefore, although it is possible to calculate an absolutely accurate personal inflation rate, this would require significant additional efforts.