FOR OFFICIAL USE.

Rialtas Sealadach na héireann.

MINISTRY OF ECONOMIC AFFAIRS.

REPORT

ON THE

COST OF LIVING

IN

IRELAND

JUNE, 1922.

DUBLIN:
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1922.

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PREFACE.

It having been represented to the Provisional Government that it was desirable to calculate an official figure indicating in respect of Ireland the change in the cost of living at the present time as compared with the cost of living in 1914, the Provisional Government appointed for the purpose on 10th June, 1922, a Committee comprising representatives of the Ministries of Agriculture, Finance, Economic Affairs and Labour. The Committee reported on the 4th August, 1922, and the result of its enquiries, together with the Committee's detailed explanation of the procedure adopted, are appended hereto.

The conclusions set out in the report represent the closest approximation which is practicable to the average increases in the cost of maintaining, in particular months of the current year as compared with July, 1914, the same standard of living for a family dependent on wage earnings in places with 500 or more inhabitants. The inquiry applied to the whole of Ireland, and its basis is therefore broad enough to be reasonably dependable for any practical purpose to which a calculation as to changes in the cost of living can usefully be applied.

It is proposed to arrange for the calculation at intervals of three months of a cost of living figure on the same basis as that adopted by the Committee for the purpose of this report. September will be the next month for which a figure will be determined.

It is to be observed that the information collected in the course of this inquiry has incidentally revealed relations between the wholesale and the retail prices of several important commodities and between the prices of the same commodity in similar localities which require explanation. This matter is being further examined with a view to determining whether any undue advantage is being taken of the general body of consumers, and, if that be the case, to the adoption of appropriate remedies.

Ministry of Economic Affairs,
        23rd August, 1922.

THE COST OF LIVING

IN

IRELAND.

REPORT

To the Chairman, Provisional Government, Ireland.

By minute dated the 10th June last we were appointed by the Government to determine the cost of living in Ireland for the months of March and June, 1922, as compared with the cost of living in July, 1914, on such a basis as would show the average increase in the cost of maintaining the same standard of living for a family dependent on wage earnings. We were asked to complete our calculations not later than July 15th, if possible, but owing to the fact that a considerable proportion of our staff were unable to reach our offices during the recent troubles in Dublin we were given until the 25th to complete our work. The following letter was sent to the Head of the Government on the 26th July:—

The following Report, while bringing out the points essential to a purely Irish cost of living inquiry, can hardly be regarded as exhaustive, in view of the mass of figures collected which could be examined from many different points of view. Had we been able to spend a longer time in digesting these figures we should not have arrived at any different final result as regards the Irish cost of living figure; but we think that many interesting and important facts might be brought out by a further analysis of the figures which we have not had time to undertake, and we suggest, therefore, that the Government should request the Ministry of Economic Affairs to investigate more thoroughly, from the point of view of their general economic significance, the figures collected and compiled.

Method of Compiling Cost of Living Figures.

In every country in which cost of living figures have been obtained the same method, as far as broad lines are concerned, has been followed. The method adopted is to ascertain the average retail prices for a number of representative commodities for the dates to be compared and then to combine these retail prices in a single figure representing the change in retail prices as a whole. This combination is not effected by a plain average, but the individual price changes are "weighted" according to a comparison of the amounts spent on each of the commodities concerned (e.g., a change in the price of a commodity such as bread, must obviously be given more "weight" than a change in the price of such commodities as cheese or soap) and in order to determine the proper "weight" to attach to the retail price changes, representative family budgets are obtained showing the details of the actual expenditure of a large number of households. By combining these budgets it is possible to discover the relationship between the consumption of the various items; for instance, 12s. may be spent on meat for every 5s. 6d. spent on butter, and so on. The retail price changes can then be "weighted" according to the results given by the budgets and the final figure arrived at by combining them on these lines.

Stages of our Inquiry.

Our inquiry can, therefore, be divided into four main stages:

(A) Collection of Retail Prices.

We found that as regards articles of food much of the information we required had already been collected by the Ministry of Economic Affairs who had obtained returns for July, 1914, and March, 1922, from 420 sources in towns of 500 persons and upwards; and also that retail prices of a certain number of articles of food had been collected in 1914, in Ireland by the Labour Statistics Branch of the Board of Trade.

Our first task was, therefore, to collect returns of the retail prices in June, 1922, of all the commodities selected, and of the corresponding prices in July, 1914, and March, 1922,