By Steven Scheer
JERUSALEM, Feb 10 (Reuters) - Israelis have become more savvy shoppers in the wake of protests over the costs of living in 2011, resulting in the government lowering the weighting of food, clothing and other necessities in a basket of goods that measures monthly inflation.
The Central Bureau of Statistics on Sunday said it was raising the weighting of housing rentals in the consumer price index (CPI) to 25.2 percent from 24.4 percent. But it lowered the weight of food to 16.5 percent from 16.9 percent and clothing and footwear to 3.05 percent from 3.13 percent.
The bureau updates the CPI's weightings every two years and makes changes depending on price differences and how much a household spends on various items each month.
Merav Yiftach, director of the consumer price sector at the statistics bureau and author of the new weightings, said the mass protests in 2011 triggered a change in Israelis' shopping habits.
'Consumers now are paying attention to discounts and are shopping in discount shops,' she told Reuters, noting that Israelis no longer just accept high prices and have responded to increased competition. 'They can go to another shop and they can drive to discount shops outside of their cities.'
However, Israelis are still paying more a month than two years ago.
According to the bureau, the CPI's basket of goods based on its new weightings costs each household 13,984 shekels ($3,779) a month - up from 13,504 shekels based on the old weightings.
Most of the price increases, Yiftach said, came from items that consumers have no control over - such as gasoline, electricity and other utilities, and travel abroad due to a spike in airfares.
Housing prices have soared the past few years amid strong demand and limited supply, while electricity costs have jumped as state-owned utility Israel Electric Corp turned to more expensive fuels after natural gas supplies from Egypt stopped.
A small group of protesters hit the streets in mid-2011 to show their frustration at a surge in cottage cheese prices. The concerns then turned to the need for more affordable housing and culminated with a mass protest of some 400,000 against the overall high cost of living.
One response to the protests was to lower free education to the age of three from five. Along with a drop in the costs of weddings and other parties, the move to free kindergarten helped to lower the CPI's weighting of education, culture and entertainment to 11.7 percent from 12.5 percent.
The bureau will publish the January 2013 CPI with the new weightings on Friday.
($1 = 3.70 shekels)
(Editing by Greg Mahlich) Keywords: ISRAEL CPI/WEIGHTINGS
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