The CPI is an index number measuring the average price of consumer goods and services purchased by households, with the per cent change in the CPI commonly used as a measure of inflation. The Australian CPI measures quarterly changes in the price of a ‘basket’ of goods and services which account for a high proportion of expenditure by metropolitan households in Australia.9
This study focused on the food group of the CPI which is further sub-divided into 26 expenditure classes.8 We classified the expenditure classes as ‘core’ (i.e., essential part of a nutritious diet) or ‘non-core’ (i.e., not essential and considered to be energy-dense and nutrient-poor) on the basis of nutritional value using criteria set down in the Australian Guide to Healthy Eating.10 Linear trends in the CPI for food (weighted average of eight capital cities, base 1990) were analysed for the period from September 1989 to September 2007.
Of the 26 food expenditure classes, 15 were classified as core: milk, cheese, bread, breakfast cereals, other cereal products, beef, lamb, pork, poultry, bacon and ham, processed meats, fish, fruit, vegetables, eggs. Eleven were classified as non-core: ice cream and other dairy products; cakes and biscuits, soft drinks, waters and juices, snacks and confectionery, restaurant meals, take away and fast foods, jams, honey and sandwich spreads, tea, coffee and food drinks, food additives and condiments, fats and oils, food not elsewhere classified.
All prices (indexes) were log transformed. Using Ordinary Least Squares (OLS) and correcting for auto-correlation using the Newey-West method, regression co-efficients were derived between the years 1989 and 2007 for each of the 26 food expenditure classes, for the food group overall and for all expenditure classes classified as core (n= 15) and non-core (n=11). The regression co-efficient represents the linear trend for average CPI per quarter.
A Wald test was then carried out to test whether the average percentage increases in the price per quarter for each of the food expenditure classes were statistically significantly different from the average percentage increase in the price per quarter for food overall. Results were considered statistically significant for a p-value<0.05.
The average percentage increase in price of selected core and non-core foods were then compared for two specific food choices: a meal or snack (bread vs cakes and biscuits) and a beverage (milk vs soft drinks, waters and juices). All analysis was carried out using Eview.