Producer Price Index Manual: Theory and Practice ... - METAC

Glossary
Transfer price
A price adopted for bookkeeping purposes used to
value transactions between affiliated enterprises integrated
under the same management at artificially high
or low levels to effect an unspecified income payment
or capital transfer between those enterprises. See “intra-company
transfer price.”
“True” index
A theoretically defined index that lies between the
Laspeyres price index and the Paasche price index.
For a theoretical output price index, the Laspeyres
output price index is the lower bound and the Paasche
output price index is the upper bound. For a theoretical
input price index, the situation is reversed: the
Paasche output price index is the lower bound and the
Laspeyres output price index is the upper bound. See
“FIOPI” and “FOIPI.”
Turnover
See “revenue.”
Unequivocal price index
See “‘pure’ price index.”
Unique product
A product that is manufactured only once to the specification
of an individual customer.
Unit-value index
A “price” index that measures the change in the average
value of units. These may not be homogeneous,
and the unit-value index therefore may be affected by
changes in the mix of items as well as by changes in
their prices.
Unit-value “mix” problem
The change in the value of a unit-value index, thereby
implying a “price change,” that arises from a change
in the relative quantities of the items covered without
any change in their prices.
Universe
The population of producers and products to be sampled.
Upper-level index
An index constructed from elementary or lower-level
indices. Weights are used to combine them.
Value
At the level of a single homogeneous good or service,
value is equal to the price per unit of quantity multiplied
by the number of quantity units of that good or
service. Unlike price, value is independent of the
choice of quantity unit. Values are expressed in terms
of a common unit of currency and are commensurate
and additive across different products. Quantities, on
the other hand, are not commensurate and additive
across different products even when measured in the
same kind of physical units.
Value added
Gross value added is the value of output less the value
of intermediate consumption; it is a measure of the
contribution to GDP made by an individual producer,
industry, or sector; gross value added is the source
from which the primary incomes of the SNA are generated.
Net value added is the value of output less the values
of both intermediate consumption and consumption of
fixed capital.
Value-added PPI
The weighted average of an output PPI and an input
PPI.
Value updating
See “price updating.”
Value weights
The measures of the relative importance of products in
the index. The weight reference period values or
shares of the various components of output (or input)
covered by the index. Being commensurate and additive
across different products, value weights can be
used at aggregation levels above the detailed product
level. See “quantity weights.”
VAT
Value-added tax. A wide-ranging tax usually designed
to cover most or all goods and services. It is collected
in stages by enterprises obliged to pay the government
only the difference between the VAT on their sales
and the VAT on their purchases for intermediate consumption
or capital formation. VAT is not usually
charged on exports.
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