Constructing Producer Price Indexes and Import and Export Price Indexes
This seminar is designed for economists, statisticians,
researchers, analysts, and managers working with producer price indexes or import and export price indexes in national
statistical programs. Participants
should have an elementary knowledge of statistics.
To strengthen capabilities for the production and analysis of statistics on
producer prices and import and export prices with relation to:
- Designing, constructing, and analyzing indexes of producer prices and import and export prices
- Using statistical tools such as probability sampling and regression
analysis in the measurement and analysis of producer prices and import and export prices
This seminar is designed to present the theory, techniques, and methodologies
for planning, designing, implementing, and maintaining statistical programs for
the measurement of producer prices and import and export price indexes.
The Producer Price Index (PPI) is a family of indexes that measures the average change
over time in the selling prices received by domestic producers of goods and services.
PPIs measure price change from the perspective of the seller. This contrasts with other
measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser's
perspective. Sellers' and purchasers' prices may differ due to government subsides, sales and
excise taxes, and distribution costs.
Producer Price Index data are widely used by the business community as well as government.
Three major uses are:
- As an economic indicator. The PPIs capture price movements prior to the retail level.
Therefore, they may foreshadow subsequent price changes for businesses and consumers. National
leaders and central banks employ these data in formulating fiscal and
- As a deflator of other economic series. PPIs are used to adjust other economic time
series for price changes and to translate those series into inflation-free currency values. For
example, constant-dollar gross domestic product data are estimated using deflators based on PPI data.
- As the basis for contract escalation. PPI data are commonly used in escalating purchase
and sales contracts. These contracts typically specify cost amounts to be paid at some point in
the future. It is often desirable to include an escalation clause that accounts for increases in
input prices. For example, a long-term contract for bread may be escalated for changes in wheat prices
by applying the percent change in the PPI for wheat to the contracted price for bread. (See BLS Report
807, Escalation and Producer Price Indexes: A Guide for Contracting Parties.)
Import and Export Price Indexes (MXP) are a family of indexes that measure the average change over time in the prices
of nonmilitary goods and services traded between the domestic country and the rest of the world. The MXPs help to answer
the question "how will trade affect the production of goods and services in the economy?" and are primarily used to deflate
various foreign trade statistics.
Participants are encouraged to bring with them the following materials for
use in discussions and workshops: 1) methodologies on how data related to the
seminar topic are collected in their home countries; 2) questionnaires used in
their countries for obtaining those data; and 3) sample publications of those
The seminar includes discussions on the following topics:
Producer Price Indexes (PPI) and Import and Export Price Indexes (MXP)
- Conceptual framework
- Target population
- Sampling and weighting techniques
- Selection of sample items and establishments
- Development of specifications
- Collection and processing of data
- Construction of index numbers
- Seasonal items and other special problem areas
- Quality adjustments
- Data collection and conceptual problems in the informal sector
- Publication, presentation, and dissemination of data
- Uses of price index data
- Application of price index data in other countries
Techniques for analyzing data on prices and expenditures
- Analysis of selected statistical tools and techniques
- Use of price indexes as a deflator in the GDP
- Use of price indexes as a deflator for trade statistics
- Analysis of the ways in which price changes impact real wages and purchasing
- Measures of competitiveness
Last modified: February 9, 2017