Do Unit Value Export, Import, and Terms of Trade Indices Represent Or Misrepresent Price Indices?
Unit value export and import indices compiled from returns to customs authorities are often used as surrogates for price indices in the measurement of inflation transmission, terms of trade (effects), and to deflate import and export value series to derive volume series. Their widespread use is mainly due to their relatively low cost compared with establishment price surveys. This paper provides evidence of substantial bias in their representation of such price changes. Their continued use would mislead economic analysis. The paper considers the efficacy of alternative strategies for their improvement, and argues for a move to establishment-based price surveys.
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3-digit group average discrepancy cointegrating compared compilation countries customs data deflator deletion differences discrepancies between UVIs establishment-based surveys Eurostat export and import Export Import Export extent F-statistic Germany and Japan Germany Japan import and export Import Export Import import price index import UVIs Johannes Hoffmann lagged UVIs Laspeyres Manufacture measures of export month-on-12 month changes month-on-month change month-on-month comparisons national accounts null hypothesis p-value percent change PIs and UVIs predictive power price surveys producer price producer price index product classes product groups quality change quantity relatives Root mean squared root tests Section standard deviation statistics stratification surrogates Table 12 terms of trade ToT indices ToT PIs ToT UVI trade effect trade indices trade price indices unit root unit value bias unit value changes unit value indices Unit value Price United Nations 1981 UVIs and PIs UVls value and price value index value Price index volatility wrong sign