17.07.2015 Views

Acknowledgments US Department of Transportation - BTS

Acknowledgments US Department of Transportation - BTS

Acknowledgments US Department of Transportation - BTS

SHOW MORE
SHOW LESS

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

consumer purchases. Nonsampling error may occur if respondents provide BLS field representatives with inaccurateor incomplete information. Another potential source <strong>of</strong> error identified by BLS may occur because <strong>of</strong> a time lagbetween the Point-<strong>of</strong>-Purchase Survey and the initiation <strong>of</strong> price collection for commodities and services at resampledoutlets. Because <strong>of</strong> the time lag, the products <strong>of</strong>fered by the outlet at the time pricing is initiated may not coincide withthe set from which the CPOPS respondents were purchasing.The CPI is also subject to response error when data are not collected because <strong>of</strong> non-response. BLS established anonresponse auditing program in 1986.It reported that response rates in 1990 for transportation commodities andservices were above 90 percent.BiasFour categories <strong>of</strong> bias were identified in the BLS report, Measurement Issues in the Consumer Price Index,published in 1997. First, because <strong>of</strong> the fixed-weight nature <strong>of</strong> the index, the CPI creates substitution bias by placingtoo much weight on items measured in previous surveys from which consumers may have shifted away. Second, thestudy found that the index did not account for consumers switching to discount stores. Third, a quality change biaswas also identified when the differences between goods priced in two different periods cannot be accuratelymeasured nor deduced from the accompanying price difference between the goods. Finally, the report noted that theCPI also had a new product bias because the index inadequately reflected consumer value <strong>of</strong> products introducedinto the market. The commission concluded that the CPI overstated the true cost-<strong>of</strong>-living change by 1.1 percentagepoints per year.TABLE 3-13. Producer Price Indices for <strong>Transportation</strong> Services and Warehousing Services (NAICS)TABLE 3-14. Producer Price Indices for <strong>Transportation</strong> Equipment (NAICS)Data shown in these tables are drawn from annual issues <strong>of</strong> The Supplement to Producer Price Indexes published bythe Bureau <strong>of</strong> Labor Statistics (BLS) in the U.S. <strong>Department</strong> <strong>of</strong> Labor. These indexes represent a measure <strong>of</strong> outputsin all goods-producing American industries as well as partial coverage <strong>of</strong> service industries including transportation.BLS defines a price as the net revenue accrued to a specified production establishment from a specified kind <strong>of</strong> buyerfor a specific product shipped under specific transaction terms on a specified day <strong>of</strong> the month. BLS collects this dataseries through surveys <strong>of</strong> a sample <strong>of</strong> establishments that report their prices from economic transactions.Data CollectionA BLS field economist visits an establishment or cluster <strong>of</strong> establishments selected for price sampling. The economistuses a disaggregation procedure to select a sample <strong>of</strong> transactions from all the establishment's revenue-producingactivities. This disaggregation procedure assigns a probability <strong>of</strong> selection to each shipping or receipt categoryproportionate to its value within a reporting unit. In most cases, the final price index produced by the BLS requiresthat 1) there are at least three different respondents to a survey, 2) at least two reporting units provide priceinformation in a given month, and 3) no single respondent accounts for 50 percent or more <strong>of</strong> the weight for a givenitem.BLS regional <strong>of</strong>fices review field data for consistency and completeness. The national <strong>of</strong>fice then conducts a finalreview and a survey is then tailored specifically to establishments or clusters <strong>of</strong> establishments. BLS refers to theseas repricing schedules and sends them to reporting establishments on a regular basis. Most prices refer to areporting schedule on a particular day <strong>of</strong> the month, usually, the first Tuesday or the 13th <strong>of</strong> a month.EstimationBLS collects prices for over 100,000 items. It utilizes several different weighting schemes for the numerous indexesproduced because some products will have a greater effect on the movement <strong>of</strong> groupings <strong>of</strong> individual products.BLS utilizes the net output <strong>of</strong> shipment values as weights for the 4-digit SIC industries. Net output values include onlyshipments from establishments in one industry to other industry establishments and, thus, differ from gross shipmentvalues. The latter would include shipments among establishments in the same industry, even if those establishmentsare separate firms. BLS also makes seasonal adjustments if statistical tests and economic rationale justify them, andcomputes data when a participating company does not deliver a price report. BLS bases the missing price estimationon the average <strong>of</strong> price changes for similar products reported by other establishments.

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!