Understanding Statistics

What are Statistics?

Statistics is concerned with the collection, classification, analysis, interperetation and presentation of numeraical data. Statistics utilises data from a population in order to describe it meaningfully, draw conclusions from it, and make informed decisions. The population may be an organisation, community, district, country, or even a phenomenon such as climate.

Official Statistics
Official Statistics are published and/or endorsed by government agencies or public enterprises/parastatals, as it is the case in Botswana. They provide quantitative information on all major areas of the people of a country such as social and economic development, health, education, the environment, employment and poverty amongst others. Official Statistics are public goods, and are therefore available for and accessible to the general public. All people, including the marginalized and vulnerable can access information on social and economic development, allowing the impact of government policies and programs to be assessed, thus improving accountability. Official Statistics enable all stakeholders to plan, formulate policies, and make critical decisions for their country, regions, districts, businesses, researches, etc. Internationally, comparisions become possible as official statistics are produced following international principles, methodologies and standards.

Understanding your role in the production of Official Statistics

  • Allow Statistics Botswana to collect various statistical data from your household, business and yourself. The Statistics ACT makes it mandatory for all individuals and organisations to furnish Statistics Botswana with all required information.
  • Inform Statistics Botswana of any particular access or other needs so that they can be accommodated.
  • Provide feedback about statistical products and services through the Statistics Botswana website, telephone, email, or even walk ins.

 

What index should I use for escalation?

The decision to employ an escalation mechanism, as well as the choice of the most suitable index, is up to the user. When the terms of an escalation contract are drafted, both legal and statistical questions can arise. While BLS cannot help in any matters relating to legal questions, it does provide basic technical and statistical assistance to users who are developing indexing procedures.

I am writing an escalation contract tied to annual changes in the CPI.

Should I specify a particular monthly index from one year to the next (e.g., December-to-Decemer)? Or should I use CPI annual average indexes?

There is no right or wrong answer to your question. That said, when an escalation contract is tied to the CPI, the index to be used should be spelled out clearly in the contract to avoid potential conflicts, as the Statistics Botswana cannot mediate disputes which might arise between the parties to an escalation agreement.

Information on the CPI is available from SB Website, Statistics portal, through subscriptions to publications, and via telephone and fax,

E-mail: info@statsbots.org.bw. The latest Consumer Price Indexes can be delivered directly to a subscriber's e-mail address on the day of their release.

Technical information is available during normal working hours, Monday through Friday, by calling +267 367300

Further information may be obtained from the Statistics Botswana- Resource Centre Tel: 3671467;

Email: info@statsbots.org

How do I read or interpret an index?

An index is a tool that simplifies the measurement of movements in a numerical series. Most of the specific CPI indexes have a 1982-84 reference base. That is, BLS sets the average index level (representing the average price level)-for the 36-month period covering the years 1982, 1983, and 1984-equal to 100. BLS then measures changes in relation to that figure. An index of 110, for example, means there has been a 10-percent increase in price since the reference period; similarly, an index of 90 means a 10-percent decrease. Movements of the index from one date to another can be expressed as changes in index points (simply, the difference between index levels), but it is more useful to express the movements as percent changes. This is because index points are affected by the level of the index in relation to its reference period, while percent changes are not.

In the table that follows, Item A increased by half as many index points as Item B between Year I and Year II. Yet, because of different starting indexes, both items had the same percent change; that is, prices advanced at the same rate. By contrast, Items B and C show the same change in index points, but the percent change is greater for Item C because of its lower starting index value.

Year item A item B item C
Year I 112.500 225.000  110.000
Year II 121.500  243.000   128.000

 

Change in index points 9.000     18.000   18.000

Percent change                9.0/112.500 x 100 = 8.0   18.0/225.000 x 100 = 8.0                18.0/110.000 x 100 = 16.4

 

What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population Statistics Botswana has classified all expenditure items into more than 200 categories, arranged into eight major groups. 

How is the CPI market basket determined?

The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. For the current CPI, this information was collected from the Botswana Multi-Topic Household Survey of 2015/16.

Is the CPI a cost-of-living index?

The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure.  A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living. Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing, that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this role to also take into account changes in other governmental or environmental factors that affect consumers' well-being. 

What is the CPI?

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban and rural consumers for a market basket of consumer goods and services.