BLS Handbook of Methods

In This Chapter

Chapter 15.
International Price Indexes


Index Construction
All reporting is voluntary and confidential; therefore, no index is published in such a way as to reveal the name, price, or price behavior of a particular respondent. A publishable index must contain three or more companies with at least one item having a usable price. For the vast majority of indexes, there are considerably more than three companies responding. Price data are collected every month for 20,000 to 25,000 goods and every 3 months for 1,500 to 2,000 service items.

The primary publication of the IPP is the monthly news release. The release contains summary text, import and export price indexes, and a technical note. The summary text provides a general description of price movements for aggregate merchandise and services areas as well as for imports by locality of origin.

The merchandise indexes are published using three different classification systems - Harmonized (HS), Bureau of Economic Analysis End Use (End Use), and the Standard International Trade Classification (SITC), Rev. 3. The HS, released by the Customs Cooperation Council, was designed to be an international system used for Customs tariff, statistical, and transport documentation purposes. The HS contains homogeneous product groups, is compatible with other classification systems, is familiar to survey respondents who provide import and export prices to the IPP since it is used for customs documentation, and is used for sampling, weighting, and collection of data. The SITC, also a commodity based system, was created by the United Nations and was the first classification system used by the International Price Program to publish its price indexes.

The SITC contains historical data of export and import price indexes going back to 1974 for some categories (as compared to 1993 for HS). The End Use system created by the BEA was designed to categorize items by use or consumption rather than by the more traditional stage of production. The End Use system also has historical data available, and aggregates at the upper level which are more equally weighted than the SITC. In addition, the End Use system is used for demand analysis and to deflate the national accounts.

The international services price indexes are published using two other definitions since services are not covered in the classification systems used for merchandise trade. The first definition is a BOP basis which represents transactions between United States residents and foreign residents. The second is an International basis which represents all transactions with U.S. importers or exporters, regardless of nationality.

The locality of origin indexes for imports cover merchandise trade and are classified by industrial origin. The indexes are calculated and published for Japan, Canada, the European Union, and the Asian Newly Industrialized Countries. In addition, these indexes are grouped according to status as ''developed'' or ''developing.'' The indexes are available on a quarterly basis beginning December 1990 and on a monthly basis since January 1993.

The technical note included in the news release describes the classification systems and the methods used to calculate import and export price indexes. The technical note also describes guidelines for price data collection, the IPP revision policy, and appropriate uses of the indexes.

Historical index and percent change tables prepared at a more detailed level than the indexes shown in the monthly news release are available upon request. Import and export price indexes are published for a wide variety of commodity areas with several levels of detail. Currently, IPP publishes indexes for commodity areas with at least $2 billion in annual import trade value or at least $1.6 billion in annual export trade value based on 1995 data. Commodity areas that represent areas of trade with smaller dollar values are incorporated into the calculation of higher level indexes, but typically are not published separately.

IPP data users can access the Internet at for a variety of information from the Bureau of Labor Statistics. The IEP home page contains an electronic version of the news release as well as links to the LABSTAT database which contains the complete set of available data. All of the index series are also available for purchase on diskettes in an ASCII or spreadsheet format.

The Bureau's fax-on-demand service is another means to access data from the news release. The phone number is (202) 691-6325. For this service, the news release is divided into five parts:

2810 Text 2815 End use and locality of origin tables 2820 SITC tables 2825 Services tables 2890 Technical note

In addition, users of IPP data can be added to a mailing list at no charge for the news release or any of the detailed tables.

Next: Uses and Limitations

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