working papers "What is the Cost of Living?" - Reference Budgets

TABLE OF CONTENTS
1 Introduction...................................................................................................................................................1
1.1 The Purpose of the Study.......................................................................................................................1
1.2 The Commodity Basket Method .........................................................................................................2
2 The Role of Consumption in Production of Well-being...................................................3
2.1 Needs and Wants As Determiners of Consumption.....................................................................3
2.2 Approaches to Defining Essential Consumption..........................................................................4
3 Basic Principles and Methods of Reference Budgets ........................................................5
3.1 Principles for Compilation of Reference Budgets ........................................................................5
3.2 The Process for Preparing a Reference Budget for a Decent Minimum Standard of
Living.............................................................................................................................................................7
4 Reference Budgets for Various Household Types by Commodity Category... 12
4.1 Food ........................................................................................................................................................... 12
4.2 Housing .................................................................................................................................................... 14
4.3 Transport and Travel............................................................................................................................. 15
4.4 Clothing .................................................................................................................................................... 16
4.5 Household Equipment and Appliances and Their Wear and Tear ....................................... 17
4.5.1 Household Movables ................................................................................................................ 17
4.5.2 Consumer Electronics and Information Technology...................................................... 18
4.5.3 Household Products................................................................................................................... 19
4.6 Leisure........................................................................................................................................................ 20
4.7 Health and Hygiene.............................................................................................................................. 21
5 Conclusions and Discussion............................................................................................................. 22
5.1 Assessment of the Method and the Level of Reference Budgets......................................... 22
5.2 Discussion ................................................................................................................................................ 24
References................................................................................................................................................................ 27
FIGURES
FIGURE 1.
A diagram of the preparation process for reference budgets......................................................................8
TABLES
TABLE 1.
Reference budgets for four types of households (price information from 2009-2010)................... 13
TABLE 2.
Housing expenses in the reference budget, in euros (at 2009 price levels)......................................... 15