Sept 11 -- The Bureau of Labor Statistics (BLS) is soliciting comments on its plan to improve International Price Program (IPP) Import & Export Price Indexes (MXPI) estimates by using administrative trade data acquired from the U.S. Census Bureau. The IPP collects data from companies on import and export prices and estimates price indexes for nearly all goods trade and some service trade for the United States. The data are primarily collected with a business survey. After completion of extensive research, and in response to a decline in data collected through traditional survey methods, BLS plans to implement improvements to the quality and quantity of import and export price indexes in fiscal year 2025 by replacing data directly collected from the business survey with administrative trade records for select homogeneous product areas. Written comments must be submitted on or before October 26, 2023.
The Department of Labor, through the Bureau of Labor Statistics, is responsible for the development and publication of Import and Export Price Index statistics through the International Price Program (IPP). Currently, monthly estimates of import and export price indexes for merchandise goods are published for approximately 740 industry and product classification areas, including the Harmonized System, Bureau of Economic Analysis (BEA) End Use System, and North American Industry Classification System (NAICS). Every month, approximately 17,000 prices for merchandise goods are collected from businesses using the International Price Survey. The participating businesses are selected based on a statistically representative sample of import and export goods trade.
The International Price Program has developed an approach to maintain and expand the number of publishable price indexes of merchandise goods for the Import and Export Price Indexes. IPP plans to replace approximately a third of the sample of merchandise goods trade with administrative trade transaction records. The improvement is focused on homogeneous products; monthly prices are calculated from detailed unit values derived from timely trade transaction records. These administrative records are reported by companies for regulatory purposes and are used by the BLS for statistical purposes only. The administrative records are compiled by the U.S. Census Bureau to publish official international trade statistics. The Census Bureau is collaborating with BLS to share the records for use in calculation of the MXPI. These records have not been used previously to calculate monthly price indexes. Rather, they have been used by BLS at an aggregate level on an annual basis to establish the sample frame for the International Price Survey and to calculate annual trade weight shares.
This new process is the culmination of a long-standing BLS objective to mitigate the decline in the number of items whose prices support the published indexes. In a multi-year, multi-project initiative that began in FY2018, the following proposed improvements to import and export price indexes for homogeneous products have been validated and are scheduled to be implemented:
• Replace prices collected using the business survey with unit values of trade transaction records for the subset of homogeneous merchandise goods. This is accomplished by introducing the following improvements:
○ Revision to sample selection process to replace directly collected prices from select sampled product areas with current-period transaction values of administrative trade records for similar goods.
○ Application of a matched-model approach to administrative trade records to create unique product varieties that are consistently traded over time by:
-- Applying a rigorous approach to define unit values and product varieties that mitigates unit value bias.
-- Using coefficient of variation and other statistics to evaluate and rank homogeneity of product varieties and product categories.
-- Grouping transactions into unique product varieties within detailed product categories by implementing a product match-adjusted R-squared method that statistically ranks each combination of descriptors in transaction records. The best combination results in product varieties that are continuously traded and prices that are closest to the mean price of a variety.
-- Filtering outliers that could cause large fluctuations in monthly price.
• Improve representativity of price index by accounting for current period trade with current period price and quantity from trade transaction records for the subset of homogeneous goods.
• Reduce bias of price indexes by implementing a superlative index methodology to calculate lower-level unit value indexes for the homogeneous product categories, using same-period price and quantity information. This methodology improves the relevance and quality of price indexes by accounting for new and disappearing goods. The methodology also accounts for the seasonality and lumpiness of trade by calculating a mid-term relative between the current period unit price and the previous year's average unit price for each product variety.
• Provide historic time series that allow data users to independently evaluate the comparability of planned and current official price indexes using proposed and current data sources.
• Update the list of publishable import and export price indexes to expand the coverage from a current 700 to approximately 1,200 detailed product and industry price index series, and additionally to expand coverage of country-specific price indexes.
To assure data users that this transition to use administrative data and unit values provides for comparable price index estimates to the current approach, BLS has provided historical comparisons by calculating a research data series of the detailed 5-digit BEA End Use import and export price indexes for 2012 to 2021. BLS will continue to update the detailed research to current periods and will provide an overlap of the research data series with the official data series, once the transition to including administrative trade records occurs in 2025. . . .
MXP Research:
https://www.bls.gov/mxp/data/research.htm
FRN:
https://www.federalregister.gov/d/2023-19486 [5 pages]
