ICP Price Collection

1

• ICP Price Collection
• Regional Course on Price Statistics and ICP
• Jakarta, Indonesia
• 5-9 June 2006
• TIMOTHY LOStatistician, International Comparison
  ProgramAsian Development Bank

2
Operational Stage of the ICP

• The largest coordinated statistical survey
  undertaken globally
• Reference period is 2005 covering all six regions
  for 150 countries
• Involves price survey of the regional product
  list
• ICP surveys are the primary responsibility of the
  NSOs
• Countries are encouraged to price all 651
  products for household consumption

3
Scope defining the target price

• Target or ideal price
• Arithmetic average price of all transactions for
  the
• whole country
• whole year
• Average annual national price used to link to
  official GDP values

4
Scope defining the target price

• Necessary to sample
• Products what products are purchased -gt product
  list
• Outlets where the purchases are made -gt outlet
  sample
• Transactions when the purchases are made -gt time
  sample

5
Scope of Surveys

• For regional comparability the scope of price
  surveys must be the same in every country
• This differs from CPI scope which may be narrower
  where CPI basket of goods will vary from country
  to country
• ICP price survey is different from the CPI as
  each country does not select its own individual
  basket of items to price

6
ICP Requirements

• Product selection fixed by the regional product
  list
• countries do not select products for pricing
• A sample of places and times is needed
• for average annual national price of items is
  required

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ICP Requirements

• Scope of the survey must be the same in every
  country
• needed for international comparability
• Must use existing infrastructure as far as
  possible
• too costly to duplicate CPI infrastructure

8
Sampling Errors

• Average annual national price is an estimate.
  Therefore subject to
• sampling error
• non-sampling error
• Product transaction samples are purposive.
  Therefore
• not possible to calculate sampling error

9
Sampling Errors

• Outlet sample may be selected based on
  probability proportional to size (PPS)
• if it is, then it is possible to calculate
  sampling error
• Product PPPs are the result of two estimated
  averages
• may calculate sampling error of the ratio

10
Probability Sampling

• Random or probability sampling is preferred
• unbiased
• efficient because they have minimum variance
• Prior information needed to
• allow stratification
• selection using probability proportional to size
• PPS measure (for ICP purposes)
• ideally want product sales volumes
• in practice may use total sales or staff
  numbers

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Purposive Sampling

• Subjective selection by person or agency
• it is not common to use random sampling
• extensively used in CPI sampling for product
  transaction samples
• used for ICP product and transaction samples
• Random or probability sampling is preferred,
  however, Purposive sampling used when
• information not available for random sampling
• cost of random sampling is too high

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Product Sample

• Regional ICP product list provides the frame
• Country lists provide national sample
• includes representative available items
• excludes not available items
• try to avoid changes after survey starts
  (costs/data quality)
• includes items not included in CPI

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Outlet Sample

• Asia regional circumstances vary enormously
• Geographically
• City states/Single state countries/Multi-state
  countries
• Existing CPI infrastructure statistical systems
• single national systems/separate provincial
  systems
• highly developed systems/simple limited-scope
  systems

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Outlet Sample

• Must include both location type
• Location urban/rural provinces
• Type street stall, small shop, department store
• Outlet choice more important for ICP
• Price levels differ by outlet type cause ICP
  bias
• CPI more robust only needs price movements
• Avoid price collectors taking easy options
• Pricing in department stores easier
• Risk bias if high priced goods easier to measure

15
Outlet Sample

• Outlet survey designs should reflect individual
  country circumstances
• Remember CPI design may not be adequate

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Informal Markets

• Sampling frames may exclude informal outlets
• e.g. Street stalls itinerant sellers
• Weekly markets may be very important account
  for major part of HH purchases
• Informal markets may require location sample
• Price collectors then select specific sellers
• Bargaining no fixed prices
• Special care needed by price collectors
• With such markets there is risk of serious bias

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CPI Outlet Frame
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Multiple CPI Outlet Frames

• Multi-state countries may have many independent
  CPIs (e.g. India, China)
• Design of a single national ICP sample will need
  input from sampling experts
• A purpose-built sample needed
• Outlets should be selected on PPS basis
• Stratified sample may be appropriate
• Use expenditure weights for PPS, if available

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Alternative Frames

• Alternative frames needed if
• CPI frame not available or supplementing
  alternative frames are needed
• National level sampling frames
• May provide urban/rural, area and other broad
  level weights
• Country frames may not cover outlets
• Local level outlet sampling frames
• Usually are available

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Alternative Frames

• Issues
• Is it available for statistical purposes?
• Is it available in the required time-frame?
• Is it reliable?
• Is it current?
• Does it have the required coverage?
• Does it include size indicators?

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Sources of National Frames

• Retail trade census
• Survey of retail sales
• Value Added Tax (VAT) records
• Business registers
• Telephone directories (Yellow Pages)

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Sources of Local Frames

• Local government records
• Property tax
• Other regulatory systems
• Local chambers of commerce
• Employer organisations

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 Retail Trade Survey

• Frames may exist at national and local levels
• Useful for PPS sampling
• Usually maintained by statistics office

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Value Added Tax (VAT)

• VAT administrative records provide detailed lists
  of businesses
• up to date
• not be available for statistical purposes
• support PPS sampling (provide size details)
• exclude some sectors such as food
• exclude informal sector businesses
• If available, care needed with exclusions
• requires supplementary sources

25
Business Registers

• Maintained for
• Statistical purposes
• Administrative purposes
• May contain retail outlet locations/addresses
• May include size measures
• sales volume
• number of employees
• Useful for PPS sampling

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Telephone/Business Directories

• Yellow Pages and similar directories
• Exclude size measures
• May include detailed lists of businesses although
  might note be comprehensive
• PPS not possible
• Simple random sampling can be used

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Time Sample

• Aim at average prices for the whole year
• Need quantity weighted transaction price
• Choices Monthly/Quarterly/Annual
• Frequency determined by variability
• Type of charge annual, seasonal etc.

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Price Collections A Practical Approach

• Procedures
• The finalised regional product list of 651
  product items are provided by the RO to the ICP
  national coordinator
• Each country then identifies the items from the
  list on whether they are representative,
  available or not available
• To ensure comparability, items are reviewed
  carefully in terms of the regional product
  specifications (PS)

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Price Collections A Practical Approach

• Regional Product List
• Contains a comparable and representative regional
  basket of goods
• Minor differences even if the product
  specifications are clearly specified

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Price Collections A Practical Approach

• Example Rice
• Product Specification 5 Kg pre-packaged bag of
  Jasmine rice with low share of broken rice
• Price collected by Country A 1Kg pre-packaged
  bag of short grain rice with high share of broken
  rice
• It is clear that these two product items possess
  different characteristics and must not be
  compared as the same item

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ICP Requirements

• Provision of annual average national prices
  corresponding to the product list for the
  compilation of PPPs
• Preparation of a suitable sample frame covering
  region, province, city, outlets and urban/rural
  locations to compute a national price
• Identification of representative and available
  items by conducting pilot surveys in advance of
  the reference year
• Installation of a fully functional ICP Tool Pack
• Conduct of Tool Pack Training for participating
  countries

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Frequency of Data Collection

• Inflation and Frequency of Data Collection
• Inflation affects how often price collections
  should be conducted
• High inflation products such as food prices must
  be collected more frequently.
• Low inflation products such as household durables
  price collection can be conducted quarterly or
  semi-annually

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Frequency of Data Collection

• Fluctuation of the prices

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Frequency of Data Collection

• Countries with Reliable CPI and Low Inflation
• Countries with reliable CPI and low inflation
  semi-annual collections would be sufficient
• Average annual national price can be extrapolated
  relevant sub-indices from CPI

35
Data Submission

• Deadline and timetable on submitting ICP price
  survey data is set by regional coordinator in
  agreement with all countries
• The national coordinator sets the country
  timetable for submission in different collection
  zones to meet regional deadline

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Data Validation

• Intra-country data validation by RO is conducted
  each time a country submits the national averages
  and individual price data
• Inter-country validation are done once
  submissions from at least four countries have
  been received
• Data review workshops (DRW) are conducted each
  quarter by RO to validate data submission from
  all participating countries

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• Thank You!