1. Price Indices for External Trade of Goods Eleonora Baghy 26/05/2013
MEDSTAT Study Visit on External Trade Statistics Hungarian Central Statistical Office Budapest
Price Indices for External Trade of Goods
Eleonora Baghy
26/05/2013

2. Overview Background, purposes History Methodology Dissemination
Data Sources
Sampling
Price survey
Unit values
Index calculation
Dissemination
Macroeconomic analysis

3. Background, purposes (1)
Price index of External Trade in Goods:
Methodology
Data: external trade statistics + price survey
Measurement of
Price level changes (conjuncture)
Volume of exports and imports (deflation)
Economic growth (real GDP)
Competitiveness, seasonality e.g. (macroeconomic analysis)

4. Background, purposes (2)
∆Value=∆Price+∆Volume
+∆Quality
International recommendation:
Filter quality changes from price index
Real price changes
Data collection
Stricte definition of observed item

5. Unit values versus Price Indices (1)
Price survey
Commodity specification
Coverage - non response, missing data
Organisation – staff, special knowledges
Costs

6. Unit values versus Price indices (2)
Unit value indices:
Widely used
Based on External Trade Statistics
Nomenclature not enough detailed
Compositional effect – quality changes
Low costs
High coverage
„Unit value indices are not price indices because their changes may be due to price and (compositional) quantity changes.” (XMPI Manual, Ch.2, Par.2.1, IMF 2009)

7. Unit values versus Price indices (3)
Hybrid Method
Unit values:
relatively homogenious products
relatively constant composition
Price survey:
heterogenious products
short life cycle
Stratisfaction: depends on
structure of turnover
National specialities

8. History of the Hungarian External Trade Price Statistics (1)
: price index compilation based on survey
few companies (about 50-60)
coverage: 50-60% of turnover
2000 products items/flow
Fisher formula
: retrospective compilation of UVI
About 300 items/flow
Coverage: 55-60%

9. History of the Hungarian External Trade Price Statistics (2)
: unit value indices
Transition to market economy
Liberalisation of external trade
Change of data source
Compilation quarterly
Completed with surveyed price data (10-15%)
Paasche-formula – quarterly compilation
Fisher formula – years

10. History of the Hungarian External Trade Price Statistics (3)
: unit value indices
Sampling method:
Cutoff sampling (threshold)
Filter:
Transaction code (processing)
List of surveyed products
Stratisfaction by:
Flow (exports/imports)
Commodity code SITC 3/2/1-digit
Groups of countries

11. History of the Hungarian External Trade Price Statistics (4)
: Hybrid method
Unit value indices
Commodity sections 0-4 of SITC
Food, beverages and tobacco
Crude materials and oils, fats
Fuels
Price survey
Commodity section 5-8 of SITC
Chemicals
Manufactured goods
Machinery

12. Data sources (1) Price survey Unit values Questionnaire
External trade database
Extrastat
Intrastat
Statistical value in HUF
Quantity (if available) or net weight
Final purchase/sale

13. Data sources (2) Weights Difficulties: External trade database
All types of transactions
Difficulties:
Fixed frames:
- legal
- methodological
- quality of data

14. Price survey Sampling (1)
Procedure
Once a year - September
Based on 12 months’ data
(August previous year – July current year)
Final purchase/sale
No sample rotation

15. Price survey Sampling (2)
Definition of item:
Flow
Product: 8-digit level of CN
Specialities : + 3 digits
Country of consignement/destination
Technical parameters
Commercial conditions
Quantity unit

16. Price survey Sampling (3)
Concentrated sampling method -top down
Groups of countries
2-digit level of SITC
Product (CN8)
Country of destination/consignement
Data provider company
Technical and business conditions
1100 data providers items
Coverage: about 70%

17. Price survey – Data collection (1)
Frequency: monthly by Internet
Unit price
In national currency
At frontier parity (CiF; FOB)
Period price (weighted average for a month)
Substitutional prices
Unit price for referenc period
Unit price for previous period
Remarks

18. Price survey Data collection (2)
Verification, validation
Completeness
Data reporting application
Verification – Microvalidation
Missing data
Substitution
New items – overlap
No fixed basket
Personal contact

19. Unit values Sampling Procedure Once a year – December
Cutoff method (threshold) +
Concentrated sampling top down
Chapters of SITC (1/2/3 digit)
Product (CN8)
No selection of countries
Items: 450 (Import) 530 (Export)
Coverage: about 75%

20. Index calculation (1) Arrangement of new year’s calculation Matching
Collected prices: continous
New items: estimation for December
UV and weights: transposition tables
Rebasing
Prices : average price for the base year
UV: weighted yearly average (∑V/ ∑ Q)

21. Index calculation (2) Quality changes Price survey: Unit values:
Chain index
Information from data provider
Implementation of new items
Revision of sample
Unit values:
Base indices of similar product/coutries

22. Index calculation (3) Compositional effect - Products - Countries
Price survey – no
UV – yes
- Countries
Prices survey – limited
UV - yes

23. Index calculation (4) Data editing Processing : monthly
Omission from calculation (both)
Judgement approach (prices)
Processing : monthly
Previous year=100.0%

24. Index calculation (5) Aggregation: Elementary aggregation
Price representants CN
No turnover data
Carli formula
Higher-level aggregation
CN SITC ( 3/2/1 digit)
Fisher formula
Weighting: external trade data
Reference month (Paasche)
Monthly average of previous year (Laspeyres)

25. Index calculation (6) Macrovalidation: Time series Terms of Trade
Exchange rates (USD, Euro)
PPI – export index
Other informations:
Companies
Press
Stock market (oil, wheat, iron etc.)

26. Dissemination First releases On-line database Calculation on two bases
Main commodity groups
Main country groups
Calculation on two bases
Same period of previous year=100.0%
Previous month=100.0%

27. Use for macroeconomic analysis (1)
International comparison – indices
Limited – different:
Nomenclatures
Base period
Currency
Methodology
Definition of price representant
Sampling method
Outlier detection
Estimation of not-surveyed items

28. Use for macroeconomic analysis (2)
Comparative analysis
Sectorial competitiveness
Geographical price indices
Comparison of price levels (different countries)
Lack of base data (prices)
Prices = strictly protected information
International databases – unit values

29. Thank you for your attention!
Eleonora Baghy