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International Trade Statistics Expert Meeting, September 2006, OECD

Paris

International Export and Import Price Indices Manual

Paul Schreyer, OECD

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A bit of history

1902: first industrial commodities price index in the USA for the period 1867 – 1890

Method: un-weighted average of 250 commoditiesPurpose: investigate effects of tariff laws on prices

of domestic and imported agricultural and manufactured products

1903: first WPI for the UK presented by the Board of Trade, and mainly derived from trade accounts

Method: 45 commodities

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100 years later: the Price Index Manuals

Efforts to address index methods concerns– ISWGPS established in 1998;– ILO, IMF, ECE, OECD, World Bank, Eurostat, and UNSD– Core Group serving on ISWGPS

• ILO CPI Manual (2004) (first published 1989)• IMF PPI Manual (2004) (first published 1979)• IMF External trade XMPI Manual (draft) (first

published 1981)– Ongoing work:

• revised versions• non-English translations• Real estate price index (OECD)• Core inflation (IMF)

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Organisation of the XMPI Manual

ForewordPreface Reader's guide 1. Introduction to XMPI

methodology 2. Background, purpose, and uses of

export and import price indices 3. Valuation, timing, coverage, and

classifications 4. Data sources 5. Sampling issues in price

collection 6. Price collection 7. Treatment of quality change 8. Item substitution, sample space,

and new goods  9. An overview of export and import

price index calculation  10. The treatment of specific

products 11. Errors and bias in the export

and import price indices 

12. Organization and management 

13. Publication, dissemination, and user relations 

14. The system of price statistics 

15. Index number theory 16. Axiomatic and stochastic

approach 17. Economic approach 18. Transfer prices 19. Price indices using an

artificial data set 20. Elementary indices 21. Quality change and hedonics 22. Treatment of seasonal

products Glossary Bibliography 

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Organisation of the XMPI Manual

ForewordPreface Reader's guide 1. Introduction to XMPI

methodology 2. Background, purpose, and uses of

export and import price indices 3. Valuation, timing, coverage, and

classifications 4. Data sources 5. Sampling issues in price

collection 6. Price collection 7. Treatment of quality change 8. Item substitution, sample space,

and new goods  9. An overview of export and import

price index calculation  10. The treatment of specific

products 11. Errors and bias in the export

and import price indices 

12. Organization and management 

13. Publication, dissemination, and user relations 

14. The system of price statistics 

15. Index number theory 16. Axiomatic and stochastic

approach 17. Economic approach 18. Transfer prices 19. Price indices using an

artificial data set 20. Elementary indices 21. Quality change and hedonics 22. Treatment of seasonal

products Glossary Bibliography 

Background

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Organisation of the XMPI Manual

ForewordPreface Reader's guide 1. Introduction to XMPI

methodology 2. Background, purpose, and uses of

export and import price indices 3. Valuation, timing, coverage, and

classifications 4. Data sources 5. Sampling issues in price

collection 6. Price collection 7. Treatment of quality change 8. Item substitution, sample space,

and new goods  9. An overview of export and import

price index calculation  10. The treatment of specific

products 11. Errors and bias in the export

and import price indices 

12. Organization and management 

13. Publication, dissemination, and user relations 

14. The system of price statistics 

15. Index number theory 16. Axiomatic and stochastic

approach 17. Economic approach 18. Transfer prices 19. Price indices using an

artificial data set 20. Elementary indices 21. Quality change and hedonics 22. Treatment of seasonal

products Glossary Bibliography 

Practice of compilation

Practice of compilation

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Organisation of the XMPI Manual

ForewordPreface Reader's guide 1. Introduction to XMPI

methodology 2. Background, purpose, and uses of

export and import price indices 3. Valuation, timing, coverage, and

classifications 4. Data sources 5. Sampling issues in price

collection 6. Price collection 7. Treatment of quality change 8. Item substitution, sample space,

and new goods  9. An overview of export and import

price index calculation  10. The treatment of specific

products 11. Errors and bias in the export

and import price indices 

12. Organization and management 

13. Publication, dissemination, and user relations 

14. The system of price statistics 

15. Index number theory 16. Axiomatic and stochastic

approach 17. Economic approach 18. Transfer prices 19. Price indices using an

artificial data set 20. Elementary indices 21. Quality change and hedonics 22. Treatment of seasonal

products Glossary Bibliography 

Theoretical aspects

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Main issues associated with XMPI

Unit values rather than survey-based methods Typically, even most detailed HS category brings together

too heterogenous products to use unit values as prices XMPI Manual recommends survey-based price indices,

based on observations of fully described and differentiated products

Relevant methods are described in the XMPI Manual

Index number formulae Like with other price indices, Laspeyres-type index numbers

no more correspond to target price indices The Manual sets out the economic and index number

theoretical reasons for the choice of the target formula

Quality change and new goods Common problem in all price indices (CPIs, PPIs) that

equally affects XMPI

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Main issues associated with XMPI

Treatment of seasonal commodities For short-term indicators, the use of annual weights is

problematic when it comes to seasonal commodities: monthly price changes that are out of seasons can be greatly magnified by annual weights

Special approaches to weighting needed for seasonal commodities

Insufficient or no coverage of services While common to many price statistics, this seems to

be particularly acute in the area of XMPI with their traditional and strong focus on products

XMPIs should however benefit from strong efforts by OECD countries to develop producer price indices for services

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Drafting and review process

Based on and consistent with PPI Manual (2004), which in turn is based on, and consistent with, CPI Manual (2004).

Working under the IWGPS:– IMF drafted first version now on IMF web site;– IMF wrote to statistical authorities asking for

comments to be posted;– IMF organizing seminar in September, 2006

involving focus group of countries, specialists and interested parties;

– Comments from above to be incorporated into draft and some further specialist review;

– Refer back to IWGPI.

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Where to find manuals on the website

CPI Manual on ILO website:www.ilo.org/public/english/bureau/stat/guides/cpi/index.htm

PPI Manual on IMF website:www.imf.org/external/np/sta/tegppi/index.htm

XMPI (Draft) Manual on IMF websitewww.imf.org/external/np/sta/tegeipi/

COMMENTS – IN PARTICULAR FROM TRADE STATISTICIANS – MOST WELCOME!