PREFACE
The Australian Import Price Index (IPI) and Export Price Index (EPI) are important economic statistics with each measure having a considerable history.
The Australian Bureau of Statistics (ABS) has maintained a program of periodic reviews of these indexes. While an important objective of these reviews has been to update item weights, the opportunity is also taken to reassess methodological aspects of the indexes. The ABS has embarked on the latest of these reviews.
The main purpose of this information paper is to seek user input into clarifying the key uses of the IPI and EPI, and assess the extent to which the indexes satisfy these uses.
The paper is structured as follows. A Summary outlines the key issues discussed in the paper. Part A provides a background to the review of each of the indexes. Part B outlines major uses of the IPI, assesses the conceptual and methodological bases of the index and proposes a number of technical changes. Part C provides a similar assessment of the EPI and also discusses issues and develops proposals for technical changes.
Finally, Part D of the paper seeks user comment on the uses and suitability of each index and a number of proposed technical changes.
Comments would be appreciated by 26 November 1999, addressed to:
David Collins
Director
Producer Price Indexes Section
Australian Bureau of Statistics
PO Box 10
BELCONNEN ACT 2616
Facsimile: (02) 62527060
Email: david.collins@abs.gov.au
SUMMARY
Comprehensive reviews of the Import Price Index (IPI) and the Export Price Index (EPI) have commenced. A major outcome of the reviews will be updated item weights for each index. A number of significant issues have also been identified for consideration during the reviews.
The ABS intends to use this information paper as a means of consulting with users on the key uses of each of the indexes and how well the indexes satisfy these uses. Feedback on a range of proposed technical changes to the indexes would also be appreciated.
Major uses of the IPI include the estimation of national accounts and balance of payments volume aggregates and the analysis of inflation. The EPI is used for volume estimation and economic analysis. The ABS is very interested in being advised of any other major uses of the indexes.
An initial assessment of each index is provided in the paper in relation to these uses. From this evaluation a number of proposals have been developed for improving the suitability of the indexes.
The ABS is therefore seeking input from users on:
- key uses of the IPI and EPI;
- the extent to which the IPI and EPI satisfy these uses;
- the suitability of the range of classifications provided in the IPI and EPI publications.
In addition, the ABS would welcome any comments on the technical changes being proposed for the indexes. These include annual reweighting and chaining; using trade unit values to augment current samples for suitable EPI items; investigating alternative collection methodologies; introducing tailored exchange rate conversion lags for import prices; and using US hedonic series to better estimate imported computer prices.
