PPI Quality Assessment Framework

1
PPI Quality Assessment Framework

• Irwin Gerduk

2
PPI Survey Standardization

• Types of price
• Pricing methodology
• Sample design
• Monthly pricing procedures
• Data table formats
• Data collection methods

3
Tools for Achieving Standardization

• PPI Quality Assessment Framework
• Initial industry surveying manual
• Data initiation manual
• Monthly pricing manual
• Index methodology, index calculation, index
  review, and data dissemination manual

4
Framework Major Concepts

• Output price
• Transaction price
• Shipment price
• Representative of current period production
• Constant quality
• Monthly price measure

5
Framework Statistical and Sample Design Issues

• Sampling frame
• Sample design
• Response rates
• Planned publication detail
• Item specification

6
Scoring System

• Type A Deflator Score of above 90
• Type B Deflator Score of 70 to 90
• Type C Deflator Score of below 70

7
Assessments performed

• At completion of the design phase
• At completion of initial data initiation
• Periodically during the multi-year index
  calculation period

8
PPI vs. ATA 1990 - 2003
9
PPI vs. ATA 2004 - 2007
10
Domestic Scheduled Passenger Air Transportation

• Enormous upward bias in the PPI index in the 1990
  2003 period
• PPI and ATA indexes largely similar in the 2004
  2007 period
• Neither series is quality adjusted
• Normalized PPI score improved from 65 (Type C
  deflator) to 79 (middling Type B)