Updating Project

Producer Price Index (PPI)

OECD MeetingSantiago, 14 July 2009

Project Goal

The main goal of the project is to have the updated information about the Producer Price Index (PPI) according to the recomendations and standards of the OECD, to get consistency with the System of National Accounts.

Study of Manuals and International

Methodologies

Building frameworks and the Pre-Basket

Monthly Information gathering

Publication of new indicators

-International Manuals of Producer Price Indices FMI.-International MethodologiesCountries with high standars of statisticals.

-Building frameworks organized by destiny and economical activities.-Determining of pre-basket-Implement the survey of register.

-Definition of the basket-Design of samples for the monthly implementation-Design of forms and instructions.- Monthly Gathering.

-Establish the base year, 2009. -Study of results and -Publication of the indicators.

2008 - 2009 2009 2010

Schedule of Activities

II. PRODUCER PRICE INDEX

PRODUCER

Costs of production + Producer Profits + Subsidies

– Taxes

Intermediate Goods

Capital Goods

Final Goods

EXPORTS

Basic Price PPI

DOMESTIC MARKET

Intermediaries

Final

Consumer

Basic Price FOB

Like others índices, the PPI will be computed from a basket that will have a tree structure.

VBP(SCN)

ISIC.CL4 Díg.

CCP.CL7 Díg

Σ p * q

Basket

Category

Division

Group Group

Class Class

Subclass Subclass

Product 1 Product 2

Variety 1

Subvariety

Establishment 2

Subvariety

Establishment 1

Variety 2

WeightsClassifiersExample

Agriculture, breeding, hunting and silviculture

Agriculture, breeding, hunting and activities of linked services

Crops in general, cultivation of market products horticulture

Cultivation of fruits, nuts, plants whose leaves are used for beverages and spices

Other fresh fruits n.p.c (exclude fruits andf vegetables)

Apples

Red Apples

THE PPI INVOLVES THE FOLLOWING SECTORS OF THE NATIONAL ECONOMY:

1. Agriculture

2. Fishing (*)

3. Mining (*)

4. Industry

5. EGA

6. Construction

Domestic Market Exports

▲ ▲

▲ ▲

▲ ▲

▲ ▲

▲

▲

Economic Sectors

(*) Includes industrial sectors

Each sector will have their representative basket and will be added to the final construction of the according index

(domestic market or exports)

Category

Division

Group

Class

Sub-Class

Product

Variety

Price Index Domestic Market

Sector A

Price Index ExportsSector A

Category

Division

Group

Class

Sub-Class

Product

Variety

Publication

New IndicatorPPI Without copper

PPI Domestic MarketPPI Exports

--------

WeightsConsistent in aggregate levels with National Accounts VBP

Sales (p*q) structural

ClassifiersBranches of Activities ISIC.cl

Products CPC.clBranches of activities ISIC.3

Products CPC.1 and own

Price Basic priceBasic price and in some cases

producer price.

PPI Summary

Basket FormationTwo Indices per destiny:

Domestic Market - ExportsUnique Basket to domestic

market and exports

Base Period Year 2009 = 100 April 2003 = 100

Scope Updated PPI Current PPI

Topics to be discussed at the next Technical Comitee

a)Aggregation model

b)Selection criteria for basket

c) Imputation model

d)Treatment of seasonality

e)Base Temporality

f) Quality Adjusts

g)Splice

Publication new basketsPPI

Oct - Dic 2009

1st Publication New PPI Annual Base 2009

February 2010

IV. DISPLAY OF THE INDICATORS

PPI Improvement Program

Base of Indices:Monthly

Information Sources:Producers and

wholesalers, producer associations

Disaggregations:Own

Base of Indices :Annual

Information Sources:Producers, wholesalers

(just for purchase prices) producer associations

Clasificator:CCP.cl (based on CCP

rev.1)

Planned

Done

Done

Formation of the Basket:Unique basket for Domestic

Market and Exports

Formation of the Basket :Different basket for

Domestic Market and Exports

Done

PPI Improvement Program

Updating time of variety: Not defined

Transparency: Poorly published

methodology

Updating time of variety: 2 months

Transparency:Wide published methodology,

methodological notes

Planned

Planned

Last level with weight: Variety Done

Last level with weight: Product

PPI without copper:No measure

PPI without copper :Included

Planned

PPI Improvement Program

EGAS Sector:Just the distribution

in Electricity

EGAS Sector : Generation and distribution in

Electricity

In Process

Quality Adjustments:Does not Exist

Quality Adjustments:overlaps

In Process

Customized form for enterprises :

Only information on prices and product

characteristics

In Process

Customized form for enterprises:

Prices information, product features,

changes and replacements