The Products of the family basket Are those goods and services essential for an individual and his family to meet their basic needs based on their income.
In other words, the products of the basic basket are those that are needed to have a healthy subsistence both mentally and physically.
The concept of family basket or"basicbasket"was born at the beginning of 1900, and is attributed to the British industrialist sociologist Seebohm Rowntree Who studied the precise group of food that requires the body of people to function.
All this with the aim of solving the problem of the scarcity that the workers of the city of York were experiencing at the time.
Over time, other factors were added to the concept of family basket, and it began to be used to measure how much a person should spend to meet their primary needs and develop their human potential.
In this way, products like oil, bottled water, rice, tuna, sugar, meat, roasted coffee, soluble coffee, beer, chocolate, electricity, domestic gas, telephone service, detergents, soaps, Toothpaste, soda, oil, etc.
In several countries, the household basket is used to calculate inflation, by adding up the total cost of all the products that compose it and comparing it with the average income and expenses of families.
The family basket is centered on the average urban consumer. For this reason, rural populations, those families in poverty or those who exceed the average economic income in a country, are measured differently since their consumption habits are different.
Basket
On some occasions it speaks of the family basket as the basic family basket, using the term"basic"to refer to the limited amount of food that must be included inside the basket to meet human nutritional needs.
Foods are chosen and measured based on the calorie and protein intake needed for a family of four (mother, father and two children) to live.
It is important to note that the family basket is the minimum amount of food, consumer goods and services that a family requires not to be considered in poverty. However, a person's diet that is still out of the family basket can sometimes be more nutritious than the one included in it.
When the family basket fails to provide enough nutrients to people, the government must re-evaluate the list of items and add those that are necessary to complete it.
In countries like Mexico, the family basket consists of 80 articles, while in Venezuela, the products of the family basket amount to 400 articles, including food and services.
In the United States, on the other hand, the family basket can include all kinds of basic foods necessary for an adult between 30 and 59 years old to be well nourished. These foods include milk, eggs, rice, corn, cheese, coffee, cereal, oil, butter and meat.
Product groups including the family basket
The products of the family basket are composed of multiple elements that vary in each country. However, regardless of the country of origin, they can be classified in the following categories:
- Food and non-alcoholic beverages
- Alcohol and tobacco
- Restaurants and hotels
- Dress and footwear
- Rental housing
- Housing services
- Furniture, household equipment
- Health
- Transport
- Communications
- Recreation and culture
- Personal care
- Educational services
- Financial services
- Others
Taking these categories into account, it is easy to identify each month how much the value of products and services increases and if inflation remains stable.
These categories are also used to obtain information about consumers, taking into account the variety of prices and the quality of different products, as well as their availability for purchase.
How to calculate the family basket
The calculation of the products to be included in the family basket is based on the information collected by the central bank of each country.
This is responsible for indicating which products should be considered as basic for a family to live with what is necessary, taking into account the price of such products and the minimum income that each inhabitant of the country must receive by law.
Also, you should take into account the amount of calories a person should consume per day and the price of the products that provide the same.
In this way, you must multiply the number of products taking into account the number of calories needed to sustain a healthy diet. The sum of all products must shed the daily cost of the family basket.
When a person or family is not able to acquire all the products listed in the family basket, it is considered in poverty condition. In this way, the statistics that talk about the consumption of the family basket can be compared by the government with the number of inhabitants of the country to measure its poverty index.
Generally, the family basket can vary each year and new products can be added and others can be removed from the list that composes. All this depends on inflation, that is, on the increase in the value of the goods and services included in the basket in proportion to the average income of the country.
It must be taken into account that the items in the family basket are defined in such a way that they can be compared to each other over the years.
For this reason, the basket includes the same goods and services each year. Consumers are free to consume different products than those found in the basket, so it may affect their annual makeup.
References
- Colander, D. C., & Gamber, E. N. (2006). Calculator Consumer Price Index. In D. C. Colander, & E. N. Gamber, Macroeconomics (Pages 63-64). Cape Town: Pearson Patience Hall.
- (2012). Datablog . Obtained from Inflation basket of goods 2012: full list of what's out and what's in: theguardian.com.
- Encyclopedia, D. (2017). Didactic Encyclopedia . Retrieved from"What is the meaning of basic basket"? Concept and defnition on Basic Basket: edukalife.blogspot.com
- Hahn, F. (1981). Inflation. In F. Hahn, Money and Inflation (Page 71). Cambridge: MIT Press.
- (2017). Investopedia . From Basket Of Goods: investopedia.com
- States, D. o. (2017). CPI Inflation Calculator . Retrieved from"What is a"Basket of Goods"?: cpiinflationcalculator.com.
- States, D. o. (2017). CPI Inflation Calculator . Retrieved from"What is a"Basket of Goods"?: cpiinflationcalculator.com.