Methodological guide for developing producer price indices for services Joined Task Force OECD-Eurostat
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1 Methodological guide for developing producer price indices for services Joined ask Force OECD-Eurostat OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
2 PPI manual: 4 chapters General aspects Main pricing methods for PPIs Practical aspects Development process, quality change, quality assessment pecific industries OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
3 PPI manual: practical aspects Practice! Harmonized Concepts!Practice Chapter 3: development process Describe main phases Methodological aspects Quality: assessment, treatment, maintenance OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
4 PPI manual: practical aspects Chapter 4: specific industries From one country s practice to many Current coverage Living chapter OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
5 PPI Manual: Quality issues reatment of quality change, maintenance In chapter 3: ome examples on quality adjustment methods In chapter 4: how in practice quality adjustments are done for specific services Other specific methods for services? Maintenance: concepts and practice? OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
6 PPI Manual: Quality issues (2) Quality assessment Based on two experiences Paper (Kenessey, Buisson, McKenzie): input to assess the quality of the pricing method. o be developed in the manual? OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
7 PPI Manual: chapter 4 Country s practice: from 1 to many Current coverage: 19 industries ize of industries echnical changes Need from NA Economic trend OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
8 PPI Manual: chapter 4 aims Help for countries to implement or to renew Emphasize practical issues OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
9 PPI Manual: chapter 4 Description of the sector How the services industry is organised in countries Air transport: in majority of countries the pattern is quite similar, the number of largest enterprises is rather small for passenger air transport whereas small providers for other kind Price mechanisms elecommunications: Increasing government deregulation has stimulated strong competition amongst business OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
10 PPI Manual: chapter 4 2. Classification aspects and scope of the survey Classification used (CPC, NACE, IIC ) Real estate agency services (UK): 4 categories of property * 4 regions Final uses/users of the service Not only B to B, B to all. Distinction if necessary/possible Air transport: no distinction can be made whether the trip is for business or leisure purposes. OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
11 PPI Manual: chapter 4 3. ample design ampling frame Business Register, Annual ervices Inquiry (Accounting Isic 7412) sampling methods - small sample sizes if market competitive and transparent (Industrial cleaning), but possible sub-markets with different price development - PP sampling in many countries for Architectural and engineering activities, based on turnover stratification criteria employment/turnover, region (Cargo handling), burden (Post and courier) OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
12 PPI Manual: chapter 4 Main pricing method used (statistician tool) " Use of classification (chapter 2) " Most suitable to capture prices development " But circumstances: industry pricing methods, accounting system 5. Costs and benefits of alternative pricing methods OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
13 PPI Manual: chapter 4 6. Quality issues " Quality based on components / specifications (timeliness in road freight transport, staff and experience level in consultancy computer and related activities, characteristics of delivery in Post and courier activities ), adjustments methods " Link with pricing method (elecommunication: unit value approach) " Productivity measure " Regular follow-up o be investigated OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
14 PPI Manual: chapter 4 7. Collection of information and specification of services " Post survey, answers " Frequency: quarterly (Post and courier) even to annual (Auditing activities) " Adequate and accurate specification - Freight transport by road: size and type of vehicle, nature and weight of cargo, time criteria for delivery, domestic or export, OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
15 PPI Manual: chapter 4 8. pecific aspects " ubcontracting - Road freight transport: included - Architectural and engineering activities: excluded " Weighting/Re-weighting - Business and management consultancy activities: gross margin is used as weighting variable - elecommunications industry driven by technical changes) more frequent re-weighting " Exports - legal services activities: not relevant - Road freight transport: in; engineering activities: to be mentioned OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
16 PPI Manual: chapter 4 9. Overview of national methodologies " Pricing methods " Quality changes " Periodicity, index calculation OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
17 PPI Manual and OECD-Eurostat F: what next? # Publication Eurostat/OECD # New chapters ask Force quality assessment, quality treatment OECD-Eurostat 20th Voorburg Group Meeting on ervice tatistics Helsinki eptember 2005
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