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:—
"A Chara,—The Report of the Cost of Living Committee is not yet finally drafted, but the main lines of it have been agreed upon. We think, therefore, that we ought to acquaint you at once that our investigations show that the percentage increase in the Cost of Living of Wage Earning Classes in Ireland between July, 1914, and June, 1922, is 85.2 per cent. and the increase between July, 1914 and March, 1922, is 91.4 per cent.
"Sinne, le meas mor,"
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) The collection of retail prices for July, 1914, and March and June, 1922.
(B) The collection and analysis of representative family budgets by means of which to determine the "weighting" of the retail price changes.
(C) The combination of the retail price changes by means of the "weights" so obtained into one final figure.
(D) The results of applying different methods of "weighting."
(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,
Forms were accordingly drawn up on which this information could be collected and specimens of these forms are shown in the Appendix to the Report.
(1) Food, Clothing, Fuel and Light, and Sundries.
These forms for food, clothing, fuel and light and sundries, were sent out for completion through the channels used by the Ministry for Economic Affairs in its inquiry (viz.:—officials of the Post Office, of the Ministry of Labour, and of the Local Government Board, and in the Six-County area through other sources), and to the same towns as in that inquiry (viz.:—towns with populations of 500 and over). In the case of the larger towns more than one report was asked for, graduating from two returns to twenty returns according to their population as shown in the Census of 1911.
The following table summarises essential particulars regarding the forms:—
(2) Rents.—The forms for rents were issued through the Local Government Board, and in the Six-County area through other sources, and filled in for the most part by Rate Collectors in the several districts and towns in Ireland. They were asked to state the rents in July, 1914, and in March, and June, 1922, of about 20 houses in their districts showing the number of rooms and the Poor Law Valuation, the latter figures enabling us to ensure that the same classes of houses of wage earners were being compared. Enquiry was also made in connection with the rents of tenements, and due allowance was made for this in the final figures. The rent figures include rates in every case.
(3) Compilation of prices for individual commodities.—The next step was to calculate from these returns the average retail prices of the individual commodities selected, and this was done as follows:—
One set of average retail prices was compiled from the returns of the Post Office officials, and another from those of the other officials, and a division of the forms was made on this basis.
The retail prices of food, etc. (on Forms A, B2 and B3), and of clothing (Form B4) were then separately summarised in the two groups, viz.—those received from the Post Office officials and those received from the officials of the other Departments for July, 1914, and March and June, 1922.
(4) Compilation of Rent Returns.
The rent returns were treated in precisely the same manner, except that there was no division, since the returns were received through the Local Government Board only.
On pages 7 and 8 is the list of average retail prices so compiled:—
(5) List of Prices.
The following Table shews Retail Prices in Irish Towns of 500 inhabitants and upwards; as averaged from Returns collected by officers of the Post Office, Ministry of Labour and Local Government Board.
July, 1914. Mid March, 1922. Mid
June, 1922. P.O. M.L. and L.G. P.O. M.L. and L.G. P.O. M.L. and L.G. FOOD. per d. d. d. d. d. d. Beef lb. 8.0 7.8 13.5 13.4 13.4 13.2 Mutton lb. 8.6 8.3 16.0 15.5 16.0 15.5 Pork Chops lb. 8.9 9.2 17.5 17.7 20.1 20.0 Pork Sausages lb. 8.7 8.6 16.8 16.4 16.3 16.1 Bacon lb. 9.2 9.5 19.7 17.9 20.7 19.0 Butter, Irish Creamery lb. 13.9 12.8 23.9 22.3 23.2 22.6 Butter, Irish Farmers lb. 12.6 10.6 24.4 20.0 19.9 18.9 Cheese lb. 9.8 9.8 17.8 17.0 17.4 16.8 Margarine lb. 7.6 7.7 11.7 12.1 11.8 11.2 Margarine, 2nd grade lb. 6.2 6.1 9.1 9.6 8.8 8.4 Lard lb. 7.1 7.3 13.6 11.5 12.0 11.6 Milk, Fresh quart 2.5 2.6 6.8 6.4 5.4 4.9 Condensed Milk, Irish lb.
The following table shows Retail Prices
March, 1922. Mid June, 1922. P.O. M.L. and L.G. P.O. M.L. and L.G. d. d. d. d. Butter (Irish Factory) per lb. 21.9 21.1 22.0 20.6 Rice (Rangoon) per lb. 4.1 4.0 3.9 3.8 Rice (Java) per lb. 6.1 5.9 5.9 5.6 Jam (Strawberry) per lb. 15.7 15.9 15.2 15.2 Fresh Pork (Shoulders) per lb. 16.8 17.2 17.4 17.4 Fresh Herrings per lb. 26.1 25.3 25.6 23.7 Cod Steak per lb. 14.4 14.7 13.8 13.8 Tea (Quality most used by working classes) per lb. 36.1 35.0 33.4 32.1 Cabbage per head 3.6 3.7 3.4 3.1
The above prices, which were used as far as possible in conjunction with other figures to arrive at the correct increases between July, 1914, and March and June, 1922, in respect of commodities, less specifically described in the returns for 1914 (e.g., Butter, Rice, Jam), will also be of value in the future as an additional basis from which to calculate the change in the cost of living.
Notes on Retail Prices.
(a) Collection of Figures for 1914.
There are obvious difficulties in the collection of figures for 1914 after so long a lapse of time, and the accuracy of these figures may possibly be questioned.
Despite the eight years' interval, however, we believe these prices to be reasonably accurate. The compilers of the returns were asked to get figures in every case from the actual books kept by the shopkeepers; and the food prices collected by us are in substantial agreement with those collected by the Board of Trade in 1914. The latter are, as a matter of fact, slightly higher than those collected by us, so that if they were to be used in preference to our figures the resultant percentage increase would be slightly lower than on the figures which we have accepted.
(b) Comparison Restricted to Strictly Comparable Articles.
A point to be noted is that in comparing prices at different dates it is essential that articles of different quality should not be compared; milk, for instance, is a simple commodity and is always comparable with milk, but beef is a variable commodity inasmuch as sirloin beef is not strictly comparable with shin beef; consequently special figures showing the relative consumption and average prices of the different parts of beef, mutton and bacon were obtained on Form B3 (see Appendix), and in these cases the prices as returned for each description of meat are separately weighted by the average quantities purchased in order to arrive at the ultimate average prices for "beef," "mutton," etc.
As regards all other articles, it will be seen from the instructions on the forms that pains were taken to explain that prices must only be returned for strictly comparable articles.
(c) Accuracy of Rent Figures.
A point likely to give rise to criticism is the low percentage increase shown for rent. This figure is, however, the result of comparing the actual returns sent us by the Town Clerks and Rate Collectors, who gave the actual name of the street and the actual number of each house, and on the closest investigation we have no reason to doubt the accuracy of their figures. The average weekly rents (including rates) appearing from those returns are:—
(d) Comparison of Figures received from Post Office and other Sources.
It will have been noted from the Table of Retail Prices given above that on the whole there is comparatively little difference between the sets of figures compiled by the Post Office officials and those compiled by the Ministry of Labour and Local Government Board officials, though the Post Office figures tend to give a somewhat higher average increase of prices. This is brought out by the following table of the ratios of retail prices for the main groups of commodities for the three dates:—
1914. Mid-March, 1922. Mid-June, 1922. A B A B A B Food. 52.4 54.6 104.8 102.8 100 100 Clothing 52.7 52.9 103.9 101.7 100 100 Rent (C) 78.9 78.9 100.4 100.4 100 100 Fuel and Light 46.6 48.1 104.8 104.4 100 100 Sundries 50.5 51.9 103.2 103.1 100 100
The figures A result from the returns from the Post Office.
The figures B result from the returns from other Departments.
The figures C were obtained from only one Department—the Local Government
(In case the meaning of this table is not at once clear, it may be explained that the first line, for instance, means that for 100s. expended on food by the wage-earning households in June, 1922, exactly the same quantities and exactly the same foods could, according to the Post Office officials' returns, be purchased in March, 1922, for 104.8s., and in July, 1914, for 52.4s. and according to the other returns for 102.8s. and 54.6s. respectively; and so on with the other items).
The near agreement of these figures is a strong proof of their essential accuracy. We ultimately decided to take the average between the two sets of figures as representing the nearest approach to the truth at which we could arrive.
(B) The Collection of Household Budgets.
(1) Representative Budgets.
The second stage of our enquiry was to obtain representative household budgets, from which to compile the "weights" by which the individual price changes might be combined into a single final figure.
For this purpose a special Form was drafted (Form B6, a copy of which appears in the Appendix) and some 5,000 of these forms were despatched to National School teachers in every school in the country, accompanied by detailed instructions (of which there is a copy in the Appendix) of the method in which they were to be completed.
Notwithstanding the difficulties of the time when these budgets were called for, and the fact that a number of forms were held up and perhaps lost in the post, we were able to use 308 completed budgets of wage-earning households, received from 112 towns. This number was quite sufficient for our purpose. These budgets were excellently filled in, and, apart from the fact that such a number is in itself a fair guarantee of the statistical results obtained, we are satisfied for reasons given below of the substantial accuracy of the budgets.
(2) Wide Scope of Budgets.
The budgets received were from a very varied class of households, and as will be seen from the following list, embraced the principal industrial occupations. Labourers, Fishermen, Messengers, Servants, Pilots, Barmen, Carpenters, Boatmen, Building Contractors, Motor Boat Drivers, Plasterers, Ship Inspector, Stone Masons, Marine Engineer, Bricklayer, Mill-hands, Yachtman, Caretakers, Tailors, Post Office Workers, Housekeepers, Tailoresses, Gardeners, Herds, Dress-makers, Shop Assistants, Farm Stewards, Shoemakers, Charwomen, Dairyman, Cottage Industries, Laundresses, Egg Packer, Milliners, Washerwomen, Fowl Plucker, Shirtmaker, Hairdresser, Wool Sorter, Spinners, Smiths, Woodcutters, Embroidery Workers, Fitters, Sawyers, Hosiers, Boiler-makers, Wood-turners, Stitchers, Engineers, Body-makers, Knitters, Plumbers, Golf Caddies, Lace-makers, Machinists, Pointers, Road Engine Drivers, Crane-driver, Paper Maker, Motor Mechanics, Collier, Sextons, Car Drivers, Brass-finisher, Butchers, Carters, Bakers, Dealer, Chauffeur, Millers, Electrician, Tram Driver, Confectioner, Watchmaker, Railway Workers, Painters and Saddlers, etc.
(3) Compilation of Budgets.
Two methods of compiling the budgets were followed:—A simple addition was made of the particulars of the expenditure on each item separately recorded on each of the budgets. These particulars consisted of the expenditure on food, sundries, and rent for one week in June, 1922; the particulars of yearly expenditure on items of clothing, fuel and light were reduced to a weekly average by dividing by 52, before adding. The resulting totals gave the present average weekly expenditure on each article, and consequently the proportion which the expenditure on each article bears to the total expenditure of the average wage-earning household.
A more complex method of compilation was also adopted which should lead to an even more accurate result.
It was found by analysis of the Census figures that the proportion of children under 14 to adults (persons over 14) is approximately as 2 to 5, and an adjustment was made to bring the budgets into conformity with this proportion in order that they might truly represent the actual proportions of the population of the country, the assumption being that the percentage rise in the price of articles mainly consumed by children might be higher or lower than the rise in the prices of articles mainly consumed by persons over 14.
The budgets were accordingly classified into three groups, viz.:—"S" or simple households, consisting of not more than two persons over 14 years, and with one or more children under 14 years; "C" or complex households, consisting of more than two persons over 14 years, and with one or more children under 14 years; and "A" or adult households, in which there were not any persons under 14 years.
It was necessary to multiply the "A" group by 3, in order to bring the proportionate number of adults and children in the budgets with which we were dealing into conformity with the national proportion (5 to 2). The figures for the three groups having been totalled separately, those obtained for the "A" group were weighted accordingly.
It was found, however, that the difference between the "weights" obtained by the first and by the second methods were so small as to be quite negligible, as is shown by the following tables:—