Central Bureau of Statistics, Israel

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• Central Bureau of Statistics, Israel

Synergies in the production processes of CPI and
PPP
Merav Yiftach, Yoel Finkel UNECE/ILO, meeting of
Consumer Price Indices, Geneva, 8-9 May, 2008.
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Synergies in the production processes of CPI and
PPP

• Introduction Israels participation in ICP
• What the former work process looked like
• Improved the PPP process by Enhancing the
  synergies between CPI and PPP
• Summary and future work

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Participation countries
Eurostat - OECD PPP Programme
Coordinator Countries
Eurostat 27 European Union member stat 3 members of European Free trade area 6 Western Balkan countries Other (Turkey)
OECD 7 Non European OECD member countries Australia, Canada, Japan, Korea, Mexico, New Zealand, USA Other Israel, Russia
CISTAT and ROSSTAT CIS countries
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The former work process

• The database is received from OECD and sent to
  the price coordinator
• A weekly timetable for price collection is
  defined
• Data collection include prices, date of
  collection, details of outlets and problems in
  the process
• An editing and logical check process is applied
• The PPP coordinator sends the edited data to OECD
• The data are sent back from OECD to the PPP
  coordinator for questions and clarifications
• Additional checks are conducted in the field.

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Problems in the work process

• Refusal to cooperate
• Definition discrepancies some goods may be
  irrelevant or non-existent in the local market
• Judgmental sampling - the sampling frame problem
  for a CPI is even more complicated for PPP
• Sales
• Seasonality
• No Synergies with the CPI
• No automatic System for classification, data
  collection and editing.

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Enhancing the synergies between CPI and PPP

• The synergies between CPI and PPP divided to 3
  parts
• Price collection
• Methodology
• Technology

Price collection
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Enhancing the synergies between CPI and PPP

• Using prices directly from the CPI
• Utilities electricity, gas, water
• Telecommunications services
• Public transportation
• Insurances
• Recreation
• Other services

Price collection
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Enhancing the synergies between CPI and PPP

• 2. Prices in the CPI can be used for
  Supplemental information and logical check
• 3. Annual average for fruits vegetables based
  on the monthly CPI collection
• 4. Good representativity the selection process
  of items in the CPI based on the most popular
  item
• 5. Increasing the sample size of PPP based on CPI
  outlets
• 6.Refusals have been brought to minimum.

Price collection
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Prices collected for PPP in CPI framework ICP
2005 round
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Enhancing the synergies between CPI and PPP

• Sampling procedures for CPI have been expended to
  allow for inclusion of PPP
• Use of administrative data for CPI (housing,
  health records etc.)
• 3. Editing and logical check are performed in the
  CPI unit under the supervision of the head of
  Division and using the same methodology as in the
  CPI.

Combining price methodology of CPI and PPP in the
field work
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Enhancing the synergies between CPI and PPP

• A system which automatically classify PPP and CPI
  into identical category was developed. CPI basket
  is updated every two year and the system
  accordingly
• An initiation document for developing a total PPP
  system within the framework of CPI is now in
  process.

Similar technological principles for PPP
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Data collection - new work process
Identify and mark the items in the CPI system
Receive survey by mail according to OECD
timetable
Data collection for PPP in the field (1) if in
the CPI system, then CPI (2) items that are not
in the system - collect in large cities and/or
shopping centers in other areas
The PPP coordinator sends the edited data to OECD
Editing and logical checks
Integrate prices with CPI and compute
averages For PPP
Receive preliminary results for statistical
editing
Additional checks in the field and in the CPI
system
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Future work

• Computerize data collection HPC
• Computerize the other stages of process
• Take advantage of the present CPI technology

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Data collection with HPC -list of items
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Data collection with HPC -Specification
description
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Data collection with HPC -price collection
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Observation Controlling system for editing and
logical check
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Data collection - new work process
Identify and mark the items in the CPI system
Receive survey by mail according to OECD
timetable
Data collection for PPP in the field (1) if
in the CPI system, then CPI (2) items that are
not in the system - collect in large cities
and/or shopping centers in other areas
Will computerized
Will computerized
computerized
The PPP coordinator sends the edited data to OECD
Editing and logical checks
Integrate prices with CPI and compute
averages For PPP
Will computerized
Will computerized
Receive preliminary results for statistical
editing
Additional checks in the field and in the CPI
system