1. Price and volume measures in times of digitalisation
SNA Advisory Expert Group 5-7 December 2017

2. Eurostat TF on Price and Volume Measures for Service Activities
… in the middle of its work
Final report foreseen in June next year
Recommendations and best practices for P&V measures
Members:
CZ, DE, DK, FI, NL, NO, RO, SE, SI, UK, ECB and OECD
Digitalisation is one very important aspect!

3. Issues to be discussed Digital services E-platforms: example of Uber
Streaming
Cloud computing
Bundling
E-platforms: example of Uber
Substitution bias

4. Streaming
Most relevant for motion picture, video, television programmes, music, audio content, and software
Relevant feature: provider acquires for specific content (information products) the reproduction and distribution rights for this content
The customer acquires the right to use this content in a specific way/for specified time span
Examples: Spotify (audio), Netflix (motion picture/video)

5. Streaming, cont.
Streaming services already in many CPIs, but not in PPIs
New COICOP to introduce separate sub-class for "subscription to audio-visual content, streaming services and rentals of audio-visual content" (excludes online games)
Is the change in the offer of media content a quality change?

6. Cloud Computing Users can be private households or corporations
Services: digital storage space, computer processing power or specific software applications
No known available price indices yet
Supplier and user of the cloud service can be located in different countries
In new COICOP: "Internet access provision services and net storage services" (excludes online software)

7. Bundling of information and communication services
Bundles get more and more common, very dynamic market, bundles change constantly
CPIs are available (HICP recommendation for bundles), follow standard contract (call plan) for bundles
Eurostat Handbook: create special product groups for bundles -> practice in HICP and to be introduced in new COICOP
Quality change

8. E-platforms: example of Uber
Different perspectives:
Company: technology platform
Driver: employer or job provider
Consumer: taxi service
Economically speaking: intermediation services
-> NACE 79.90: Other reservation services and related activities
Only applicable to Dutch unit?

9. E-platforms: Uber, cont.
Different recording options:
Taxi company with self-employed drivers
Taxi company with employees
Uber provides intermediation services to the taxi driver
Uber provides intermediation services to households
Split the transaction in taxi service and intermediation service
Uber as intermediation service producing taxi services
Also: Uber as retailer/merchanter of taxi services?

10. E-platforms: Uber, cont.
Tentative conclusions:
Third option most in line with NACE and with deflation methods for consumption and output
Include Uber in taxi CPIs
Include Uber in PPIs for reservation services (follow fee %)

11. Substitution bias E.g.: how to include Uber in CPI?
Direct comparison with taxi services -> price declines
No comparison with taxi services -> volume declines
Similar issue to "outlet substitution bias", e.g. for e-commerce
Digitalisation has put this back on agenda
A standard assumption in price statistics: higher price = higher quality. But new digital products are often cheaper and better (?).

12. AEG is requested to provide their views on
Price and volume measurement of digital services
Treatment of e-platforms
Substitution bias