MARKET PRICE INDEX 2025

MARKET SURVEY NOTES

Survey Coverage

  1. The market survey for collection of prices was carried between 27th April and 8th May, 2025 in the following five (5) towns:
  • Nairobi
  • Mombasa
  • Nyeri
  • Nakuru
  • Kisumu

To download the Market Price Index, use the link below:

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MARKET PRICE INDEX AUGUST 2025 1.60 MB
 

Calculation of Price Averages for Different Towns

  1. Five (5) outlets were targeted per category in all the five (5) towns apart from

Nairobi where ten (10) outlets were targeted. A questionnaire was then prepared

describing the various items and was used to collect data from the selected outlets.

  1. Data entry and cleaning was then done to pave way for analysis. During analysis,

four variables were calculated;

  • Geometric Mean
  • Standard Deviation
  • Coefficient of Variation
  • Count

The variables were calculated as follows:

(a) The Geometric mean of prices was calculated by getting the product of the

values and taking the nth root of the product (as opposed to the arithmetic mean

which uses the sum of the values divided by n) where n refers to the number of

observations.

(b) The standard deviation– a measure of dispersion was calculated to show how far

data sets deviate from the group mean. The standard deviation was used to

calculate the coefficient of variation (CV).

(c) The Coefficient of Variation (CV)

The coefficient of variation is a measure of spread that describes the amount of

variability relative to the mean was calculated by dividing the standard deviation

by the mean and multiplying by 100. For this survey, a CV value of 30 was used

to identify and eliminate outliers. If the value of the calculated CV was greater

than 30, the highest or lowest price for the item was removed. This process was

repeated iteratively for purposes of ensuring that the prices of items were not

very far from each other.

(d) The Count

A Count is simply the number of valid prices which were used to calculate the

mean. In this case, valid prices are prices obtained after eliminating the outlier

prices as indicated by a CV of 30. For example, if we have 20 prices for an item

and the calculated CV is 35, then we have to remove the outlier prices (lowest

and highest prices) until the CV of 30 is achieved, say we eliminate 4 prices.

Then the valid prices for that item would the remaining16 prices with a CV of

30.

  1. Once the calculated value of CV was 30 or less, then the mean was reported if: –

(i)In each town, the count of remaining prices was 3 or more and for the overall

mean, the count of remaining prices in all towns was 10 or more.

(ii) In cases where there were less than 3 prices for a specific item in a town, then the

mean price for the item was viewed as prone to bias and was therefore excluded from

the report.

(iii) Similarly, if the total number of observed prices for all towns for an item was found

to be less than 10, then the overall mean for that item was not reported.

  1. The overall mean (all columns) in this report is the mean for all valid prices for that item,

including the prices which were valid but were not used to calculate the mean for the item

in the town because the number of prices was less than 3.

For instance, if two towns reported two prices each for an item, the mean for this item in

the towns was not reported. If the other three towns reported 3, 5, and 6 prices respectively

for the same item then the mean for this item was reported for the three towns. The overall

mean for this item will be based on 18 prices (i.e., 2 + 2 + 3 + 5 + 6) since this are the valid

prices for this item. In short, the overall average is based on all valid prices of that item and

is not equal to the average of the five means for each town.

  1. For towns where the mean price is not reported, the overall mean price becomes

applicable for that town. This means that if we have the overall mean price for an

item, then all towns have a mean price for the item.

  1. For items without prices both at the town level and the all column, such items were

not available during the survey or the prices were not adequate to generate

average prices. The procuring entity or stakeholders applying the results should

undertake confirmation with the market through market survey.

  1. The prices are indicative and therefore in making a procurement decision in

relation to the market price index, the procuring entity shall take into consideration

the provisions of Regulation 43(4) of the Public Procurement and Asset Disposal

Regulations, 2020.

  1. The brand names were solely mentioned to emphasize the specificity of the survey.

Therefore, the stated brand names are not an exclusive recommendation or

prescription by PPRA to public entities, but are merely mentioned for the purpose of

information.