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The price indexes don’t have a uniform evolution, and they actually
vary according to the region and income category. On top of that, they also vary according to the consumer’s age. The Consumer Price Index for Senior Consumers (CPI-3I) will be added to the other indexes calculated by the Data Management Division of the Brazilian Economics Institute (Ibre, Instituto Brasileiro de Economia) of the Getulio Vargas Foundation. According to economist André Furtado Braz, the CPI-3I could be a tool for the creation of public policies aimed at senior citizens, such as retirement fund payments. The 1988 Constitution and the 2003 Senior Citizen’s Statute don’t specify references or indexes that may be used for assuring the purchasing power of elderly citizens that they intend to benefit.
“We could also develop a variety of studies for improving the quality of life of senior citizens,” adds André Braz. Brazil has 15 million senior citizens, three times as much as in the 1970’s. Estimates show that, over the next 25 years, this figure will be increased to 32 million. This is partly due to the increased life expectancy that between 1991 and 2000 alone went from 66 to 69 years. In 2003, it reached the age of 71.
The concern with senior citizens is growing all over the world. Fifty years ago, they corresponded to 8 percent of humankind, and in 2002 they totaled 10 percent; however, the proportion of this population category is growing fast, and by 2050, 21 percent of the planet’s inhabitants will be elderly people, who will exceed the number of youngsters (people less than 15 years old). In 2002, the absolute number of senior citizens equaled 630 million, but there will be two billion within 50 years. The worst aspect is that 80 percent of these people will be living in less developed countries, which have poorer conditions, from the financial perspective as well, for handling the increased needs. Therefore, initiatives specifically aimed at the elderly are essential for guaranteeing a sustainable, equitable development, so that getting old won’t mean the loss of quality of life.
However, based on the findings made up to the present moment by the Getulio Vargas Foundation, life is more expensive for those who have lived more. Data collected between January and May 2004 have shown that, except in the first month of the surveyed period, when school prices were adjusted, the CPI-3I had a higher increase than the CPI-Brazil (CPI-BR), which measures price variation for the population as a whole. The difference would be explained by the increase in medicine and diet food product prices. Over the past 12 months, the CPI-BR had a 5.8 percent increase, and the CPI-3I, 6.5 percent. The survey that encompasses the period between May 1996 and March 2004 shows a significant difference, with adverse impact on senior citizens. The CPI-BR totaled 74.56 percent and the IGP-3I totaled 92.15 percent (see Table 1).
Expenses with health and personal care have a higher weight for the elderly (people over 60 years old), while transportation and education, for instance, have a smaller impact. Among older people, health expenses consume 15 percent of their income; for the population in general, the percentage corresponds to 10.4 percent. According to André Braz, among the monthly expenses made by senior citizens, subscription TV, Internet services and newspapers and magazines also have a higher impact.
Also interesting is a comparison with the United States, where disease prevention and treatment expenses are high. In the USA, families reserve 5 percent of their incomes for this kind of expense. Among people more than 65 years old, the percentage goes up to 11.5 percent. Only among people more than 75 years old does the cost of health care total the 15 percent spent by Brazilian families, in which people more than 60 years old are the majority.
The IGP-3I, which will be included to the family of indexes calculated by the Getulio Vargas Foundation, was created based on the Family Budget Research (POF, Pesquisa de Orçamentos Familiares) performed in the country’s 12 most important capitals in 2002/03. This specific CPI version doesn’t contemplate families with senior citizens only. The structure of the index was defined based on families with at least half of its members who are senior citizens with income between one and 33 minimum wages.
The capitals included in the research are Belém, Belo Horizonte, Brasília, Curitiba, Florianópolis, Fortaleza, Goiânia, Porto Alegre, Rio de Janeiro, Recife, Salvador, and São Paulo.
The final package of the index for senior citizens has an architecture similar to that used by the traditional CPI published by the Getulio Vargas Foundation. The consumption structure may be divided in seven groups, 25 subgroups, 88 items and 450 sub items. The main difference between the CPI-BR and the CPI-3I is the fact that the latter has 25 sub items less than the former. In the set of families selected for creating the index, 82 percent of the members were more than 60 years old, which assures that the index is relevant in terms of inflation measurement corresponding to that population segment. •
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