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# 20.1% yearly inflation in Estonia
- URL: https://www.taivo.ai/estonia-inflation-2022/
- Published: 2022-06-03T09:40:46.000Z
- Updated: 2022-06-03T09:40:46.000Z
- Description: What did Estonians start paying more for in April 2022?
- Author: Taivo Pungas
- Tags: Everything else

There's rampant inflation in Estonia. [Eurostat](https://ec.europa.eu/eurostat/documents/2995521/14636256/2-31052022-AP-EN.pdf/3ba84e21-80e6-fc2f-6354-2b83b1ec5d35?ref=taivo.ai) estimated the yearly growth in consumer prices at 20.1% in the 12 months leading up to May 2022.

Why? Tyler Cowen [posed](https://marginalrevolution.com/marginalrevolution/2022/05/why-is-eurozone-inflation-so-high.html?ref=taivo.ai) the same question in his blog. I can kinda-sorta point at an answer because I live in Tallinn and have seen massive increases in energy prices recently, and hear daily news about downstream effects on all kinds of businesses. But I didn't have a good grasp on what exactly has gotten more expensive.

So I visualized a breakdown of cost-of-living increases. Eurostat puts together a granular basket of goods whose tracks price movements it tracks. For example, it has separate entries for

- CP01111 Rice
- CP01115 Pizza and quiche
- CP03122K Ladies bikini (1 set)
- et cetera

At this level of detail, it is hard to understand the big picture. On the other hand, saying that the category "CP01 Food and non-alcoholic beverages" has gotten expensive is not very informative.

Treemaps are a great solution for displaying hierarchical detail, so that's what I used. The figure below shows where *additional* spend in the month of April 2022 came from, for a typical consumer. Intuitively, this chart answers the question:

**What did Estonians start paying more for in April 2022?**

[**Here's the interactive chart**](https://taivoai-public.s3.eu-central-1.amazonaws.com/inflation%5Fcharts/2022-04.html?ref=taivo.ai) where you can zoom in yourself, and see monthly data going back to August 2021\. And here's a short video of it if you can't be bothered to click:

0:00

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1×

What does this chart show, exactly?

- The area of each category of goods corresponds to how many extra euros a typical consumer had to spend on it on April 30, compared to April 1.
- When you hover over a box, the `val` shown corresponds to a monthly budget increase in that category, for someone with a total monthly budget of 1,000€.
- This is calculated from the basket weights and the category's monthly inflation: if 25% of your 1,000€ monthly budget is spent on food, and food prices increased 2.4% in April, then the chart will show `25% * 1000€ * 2.4% = 6€` as the budget increase for food. Previously you spent 250€ on food every month, now you spend 256€ every month.
- The chart shows the 6€, not the 256€, so it does not show a monthly breakdown of the basket; rather it breaks down the *increase* in basket costs.

Some caveats:

- If the price of a category of goods went down in a month, this is not plotted (it's hard to intuitively convey negative values on a treemap).
- The Eurostat-provided totals for a month don't quite match the bottom-up sums I calculate. I think this is because of a) rounding errors in the input data, and b) I ignore negative index changes. I don't understand this well; that probably means there are errors up to 30-40% in my calculations.
- If you want to see how Eurostat calculates the price index, see their [HICP manual](https://ec.europa.eu/eurostat/documents/3859598/9479325/KS-GQ-17-015-EN-N.pdf/d5e63427-c588-479f-9b19-f4b4d698f2a2?ref=taivo.ai) (Chart 3.1 on page 38 is a good overview).

And if you're interested, the code is on Github: [taivop/inflation](https://github.com/taivop/inflation?ref=taivo.ai).