The sample design is responsive to the constraints of both cost and respondent burden. Budget constraints determine the maximum number of establishments selected in a sample, and respondent burden limits2 control the number of items priced by each establishment.
Unfortunately, the majority of detailed product categories sampled in the second stage do not contain items that are traded frequently enough to be consistently priced over time. IPP receives initial price data for approximately 40 percent of the sampled establishment/detailed categories.
The earliest IPP samples were based on judgmental selection of establishments and items whose price movement was considered representative of the respondent's other items in the same detailed product category. IPP began using a probability sampling technique3 for the first two stages in 1976 and for the subsequent stages in 1982. In order to maximize productivity, efforts are made to ensure that frequent traders make up 95 to 99 percent of each sample.
Starting in 1989, IPP divided the import and export merchandise universes into halves. Samples for one import half and one export half are fielded each year, so both universes are fully re-sampled every 2 years. The sampled products are priced for approximately 5 years until they are replaced by a fresh sample of the same half-universe. Generally, each index is composed of two samples.
As of 1991 a selected item can be represented in the indexes up to 10 times per sample, an increase from a maximum of two times for older samples. This allows items with larger shares of the detailed product category to have more weight in the indexes and reduces the number of items for which the respondent needs to provide monthly prices.