Chapter 15.
International Price Indexes
Index
Construction
The import and export price indexes are of the
Laspeyres type and use two aggregation methodologies. At
the lowest level, items are weighted within
establishment/detailed categories. These relatives are
combined across establishments and then aggregated to
lowest level stratum indexes.
where:
Pht is the price index at period t for
lowest level stratum h,
wkt is the weight at period t of
detailed product category k within stratum h,
wjt is the weight at period t of
establishment j within detailed product category k,
wit is the weight at period t of item i
within establishment j and detailed category k,and
pit/pi0 is the price relative of item i
from period t to base period 0.
The weights used for the lowest level stratum indexes
are based on data from several samples and are derived
from the dollar values on the sampling frames, divided by
the corresponding probabilities of selection determined
by the sample design. Each establishment/detailed
category pair (collectively, the "weight
group") is considered to be a relatively homogeneous
collection of items. Therefore, each set of items
selected within a weight group also represents
non-selected items within the weight group.
The index formula above is used for lowest level
stratum price indexes as of January 1997. In prior years
items were equally weighted within the detailed product
category. Adding sampling weights at the item and company
levels gives a more accurate measure than equally
weighting because the true importance of the largest
companies and their products is reflected in the sample
design and the estimator.
At the next step, lowest level stratum indexes are
aggregated to successive upper index levels.
where:
PHt is the price index at period t for
upper level index H,
wht is the weight at period t of child4 index h,
Pht is the price index at period t for
child index h.
The weights used for the upper level indexes are based
on trade value figures compiled by the Bureau of the
Census for the base year. Beginning with January 1997,
the base year weights are from 1995 trade values. Price
indexes from 1993 through 1996 use 1990 weights, indexes
from 1985 through 1992 use 1985 weights, and data prior
to 1985 use 1980 weights.
Footnotes 4A child
stratum is at one less level of aggregation than index H.
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