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

Producer Price Index Manual
1.379 If reweighting is done on an infrequent basis
using data from a single year, it is important that
a normal year is selected in terms of providing
weights that can be expected to be representative of
the period (say five years) for which they are used
in the index. Again, the use of data from a run of
years may be prudent.
1.380 In addition to developing a reweighting
strategy, it is desirable to undertake thorough periodic
(say every five or ten years) reviews of the
PPIs to ensure that the conceptual basis is still relevant
to the needs of users.
Summary
1.381 Early consultation with users and decisions
on the scope and conceptual basis of a PPI are fundamental
to the production of a relevant index. In
order for the index to be accurate, it must be constructed
using indicative transaction prices, measured
to constant quality, and representative weights.
decisions on sampling strategies and other methodological
matters. Ensuring the security of often
commercially sensitive price data is another essential
prerequisite to building good business relationships.
1.383 A dissemination strategy that meets the
needs of the wide variety of users must be developed,
and ongoing consultation maintained, to ensure
to insure that users’ requirements continue to
be met.
1.384 It is important to appreciate that a price index
seeks to provide contemporary information in
relation to dynamic markets. As such, it is not sufficient
to develop a new index framework, establish
the collection of the price samples, and simply aggregate
them over time. Mechanisms need to be put
in place to ensure the ongoing integrity and representativeness
of the measure. That is, the price
samples and weights need to be systematically reviewed
and updated periodically.
1.382 The issue of reporting burden is an important
consideration in seeking the cooperation of
businesses and, along with resource constraints facing
national statistical agencies, heavily influences
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