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Introducing a New Estimator for the Producer Price Index
Describes the changes implemented during a major redevelopment to improve the quality of the Producer Price Index (the biggest change for over 40 years) and outlines the impact on results
The Producer Price Index (PPI) has been undergoing a major redevelopment that will significantly improve the methodology used. A new method of estimation is to be introduced as the culmination of this redevelopment - the biggest change to the PPI for over 40 years. A lengthy parallel run has been undertaken to fully assess the difference in current and new estimator results and quality assure results produced on the new estimator basis. This found little difference between current and new estimator results at the aggregate level with larger differences for the detailed level indices. Other areas of methodological development have also been considered as part of the project. These include the need for an outlier detection method and producing estimates of accuracy (sampling errors) for new estimator results. It is planned that the new estimator will be introduced for the September 2001 PPI, to be published early October 2001.
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