Consumption, culture, change

Published June 30, 2022
The writer is a former deputy governor of the State Bank of Pakistan.
The writer is a former deputy governor of the State Bank of Pakistan.

READERS beware. This title could be misleading, but our changing CPI (consumer price index) basket, besides tracking inflation, says a lot about our culture. Our current CPI basket is based on the Family Budget Survey 2015-16, not published by the Pakistan Bureau of Statistics that prefers to publish the Household Income and Expenditure Survey. With every Family Budget Survey, PBS selects a base year and a basket of consumption items, which remain fixed for several years until it performs the base-change exercise again. The old CPI basket was based on a survey done in 2007-08. Older baskets pertained to base years 2001-01, 1990-91, 1980-81, 1975-76, 1969-70 and 1959-60.

We can learn much about our culture simply by identifying which items exited the new basket and which items entered it. Leaving the basket does not necessarily mean an item became obsolete. It may just mean that it is no longer significant in terms of an average family’s monthly expenditure. Similarly, a new entrant might be old but still significant in the base year. Some items might be new, eg bottled water which made its entry in 2015-16 and packaged milk in 2007-08. These items were being consumed earlier but did not have a discernible share in an average family’s consumption. Note that humankind consumed water and milk while Adam and Eve were still in paradise. Does the future basket hold air bottles for breathing? No one knows, but mountaineers use it at high peaks and critical patients need continuous puffs of oxygen from a cylinder to stay alive.

Clothing differences between urban and rural areas are reflected in the dhoti’s disappearance from the urban consumption basket of 2015-16; it is still present in the rural consumption basket. Dry cleaning charges for pants and coats have entered the urban basket, but obviously not the rural basket. Lipstick and nail polish existed in the 2007-08 basket and are included in the urban, but not rural, basket. Is that surprising? Gold, silver and artificial jewellery existed in the 2007-08 basket. Silver is no longer included in the rural basket, but the rest are there, and the urban basket still has all three items. Our rural ladies prefer either gold or gold-like jewellery to silver. Women’s purses have entered the new baskets, rural as well as urban. One wonders why they were missing from the 2007-08 basket.

We can learn much about our culture simply by identifying the items in our new consumer baskets.

Home-stitched and factory-manufactured quilts were present in the 2007-08 basket. But only the latter remain in the urban and rural baskets of 2015-16. The disappearance of home-stitched quilts from both baskets is surprising as one would have thought they would at least be used in the rural areas. This is a sign of the narrowing of rural-urban differences, and rising income levels in rural areas as well. In terms of cooking utensils, the pressure cooker has surprisingly disappeared from the 2015-16 baskets, and made place for the non-stick frying pan in the urban basket. This is a new entry.

A dramatic entry, related to our social and political culture, is the lota in the new basket, which was perplexingly absent from the 2007-08 basket. Everyone knows that lotas are used for personal hygiene, and considered an important item of use in our culture. In our politics, lota represents an agent (or double agent) for regime change. One only wonders why the lota wasn’t part of the earlier basket, when it was also providing the same utility as now to individuals (and politicians). One possible reason is that lotas are sturdy. You have to only buy them once or twice in several years. So, the monthly expenditure on them should be insignificant. The fact that they made an entry might indicate they are becoming expensive. But, according to PBS, the price of the “lota plastic average quality” was Rs68.13 in November 2019; it rose to Rs75.21 in February 2021. This shows that lotas are not expensive, they are cheap. There must be some other explanation for their entry in the consumption basket.

Perhaps, for some quirky reason, a significant number of households bought lotas in 2015-16 that made their expenditure share visible enough for inclusion in the CPI basket. The real reasons might only be known to PBS, which neither publishes base year prices for every item in the basket, nor their expenditure shares. It does publish the shares for 94 composite commodities (along with their price indices) classified into a dozen groups. Whether lotas will be swept away by the pressure of Muslim showers in future is not known.

PBS has done a good job, except for a couple of points mentioned above, in explaining the CPI through their publication Methodology of Price Statistics Base Year 2015-16. The urban basket is composed of 356 items and the rural 244. Both baskets are divided into 12 familiar groups: food & non-alcoholic beverages (30.4, 40.9); alcoholic beverages & tobacco (0.8, 1.3); clothing & footwear (8.0, 9.5); housing, water, electricity, gas & other fuels (27.0, 18.5); furnishing & household equipment maintenance (4.1, 4.1); health (2.3, 3.5); transport (6.1, 5.6); communication (2.4, 2.0); recreation & culture (1.7, 1.4); education (4.9, 2.1); restaurants & hotels (7.4, 6.2); and miscellaneous goods & services (4.8, 5.0). The number pairs in parentheses represent the urban and rural percentage expenditure shares for the respective groups.

Expenditure shares indicate our preferences, as well as the difference between urban and rural consumption habits. We often lament how little the government spends on education. Look at ourselves though: we spend more on eating out than getting our children educated. This is, unfortunately, true for both the urban and rural areas. The expenditure share on house furnishings is the same for the urban and rural baskets, indicating similar lifestyles inside urban and rural homes. This again is a sign that our rural areas are becoming like urban areas. And one often comes across sections of cities which give a rural look. Is this good or bad? There are too many questions for which I do not have the answer.

The writer is a former deputy governor of the State Bank of Pakistan.
rriazuddin@gmail.com

Published in Dawn, June 30th, 2022

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