SINGAPORE - A new inflation index for the elderly may be created to gauge how this group of Singaporeans is affected by changes in the prices of goods and services.
The Department of Statistics (DOS) is studying the feasibility of compiling a separate consumer price index (CPI) for elderly households, according to a report released yesterday by Parliament’s Estimates Committee.
This study will be completed by the end of this year, the committee added.
The eight-member committee examines the Government’s Budget and suggests improvements. It is chaired by Marine Parade GRC MP Seah Kian Peng and includes six other People’s Action Party MPs as well as Workers’ Party MP Png Eng Huat.
Currently, the Government releases two inflation measures monthly. The DOS’ CPI data calculates changes in the prices of a basket of goods and services typically bought by Singapore households, while the Monetary Authority of Singapore issues a core inflation figure that strips out accommodation and private road transport costs for a better gauge of everyday expenses.
Economists say a CPI focusing on the elderly would more accurately reflect living costs for this group, whose spending patterns can differ significantly from those of average households.
For instance, a CPI for elderly households should put more weight on the costs of health care, food and transportation, and less on items like education, said CIMB economist Song Seng Wun.
Even within broad categories such as health care and recreation, the types of goods and services bought by seniors would vary from those bought by younger consumers, he added.
"Older people might be spending more on services like massages and foot reflexology. Taking holidays is important too,” he said.
The index would contribute to keeping the cost of goods and services affordable for the elderly, who are a particularly vulnerable group, said Mr Song.
DBS economist Irvin Seah added that such an index would be important in gauging how much government aid elderly households need in times of rising prices.
He suggested the authorities also consider compiling another consumer price index which tracks the cost of raising children, as part of ongoing efforts to boost Singapore’s flagging fertility rate.
“Such an index might give a better idea of the kind of help parents need with childcare and medical costs,” he said.