What will it cost to have a festive dinn ...

By Saadat Khanifayeva, PR Manager at Veyseloglu Group of Companies

Economists often make comparisons between sets of figures (data) across periods of time. When displaying such data shown over time, it often makes sense to use index numbers. In other words, index numbers are a simple way of making it easier to compare numbers over a period of time.

Veyseloglu Group of Companies has come up with an index of its own, known as ‘Veyseloglu Retail Index’ amongst the economists and the business community in Azerbaijan. This indicator shows the change in the overall price level of the most purchased goods in retail outlets (Araz and OBA supermarket chains) belonging to the Group over the past 24 months. The index, however, does not indicate a precise level of inflation. You can read the latest edition of VRI here. 

What’s the point for ordinary consumers?

The indexes that represent the changes in consumer goods prices are, of course, interesting for ordinary people who can track the price changes and understand their own purchasing power. At the same time, there are plenty of various nominal indexes across the world that compare not just the prices, but other economic or monetary indicators. You may have heard of the Big Mac Index, for instance. Economic commentators in the former Soviet Union often refer to the ‘Borscht Set’ which tracks the prices for the vegetable ingredients required for this traditional Ukrainian soup (white cabbage, potatoes, beetroot, onions and carrots).

Recently, a Moscow-based economist Alexander Abramov found a rather unorthodox telltale predictor of inflation: gummy bears. He updates his figures through his Facebook posts which he calls the “Abramov Index”. In essence, this is his personal compilation of prices for the sticky marmalade candies (gummy bears) and 11 other regular family purchases that depict, according to him, a more realistic picture of inflation levels. Though unscientific and lacking in statistical rigor, Abramov’s numbers have attracted something of a following on Facebook, especially among experts seeking to figure out where price growth is headed. 

Our ‘response’ to Abramov

We've been motivated by Alexander Abramov’s approach and thought of coming up with our own index, albeit very nominal, in the run-up to Novruz, one of Azerbaijan’s most iconic and favorite festivities. We have called our own figures ‘Shah Pilau Index’ and ‘Keta Index’. Why are they nominal? Well, for starters, there is no comparison of prices here and no period of time is involved. These are simply current prices for the main ingredients in question that you can see in our supermarkets right now.  

To put things in perspective, we asked our analyst Farid Nabizade to explain what it’s all about:” Almost every Azerbaijani family will most definitely have our traditional rice dish, plov, and some traditional sweets on their festive tables. We have made some adding-up and concluded that this festive rice dish will cost 23,63 manats, while the Karabakh keta will amount to 9,04 manats for a family of 4 or 5 people. These figures are drawn based on the current prices for the main ingredients required for both plov and keta in our supermarkets today’