1 Third Workshop on ICP Western Asia Beirut, October 2004 Design of ICP price survey Sultan Ahmad, Consultant Based on Keith Blackburn, Australian Bureau of Statistics

2 Aim of this session Discuss how the actual scope for your country can be determined: geographic scope time scope Clarify choices needed when designing the ICP price survey for your country Identify possible frame sources

3 Scope – defining the target Target or ideal price National annual average price Determined by need to link to GDP values Arithmetic average price of all transactions For the whole country For the whole year Necessary to sample Products (what products are purchased; product list) Outlets (where the purchases are made; outlet sample) Transactions (when the purchases are made; time sample)

4 Errors National annual average price is an estimate subject to sample error subject to many non-sample errors Product and transaction samples are purposive Therefore not possible to calculate sample error Outlet sample may be PPS (probability proportional to size) If it is, then it is possible to calculate sample error Product PPPs result of two estimated averages May calculate sample error of the ratio

5 Probability sample Random or probability samples preferred Unbiased Efficient – have minimum variance Prior information needed Allow stratification Selection using probability proportional to size (PPS) PPS size measure (for ICP purposes) Ideally want product sales volumes In practice may use total sales or staff numbers

6 Purposive sample Subjective selection by person or agency CPI – used extensively Could use random sampling for products but don t ICP – used for product and transaction samples Random or probability sampling preferred Purposive sampling used When information not available for random sampling –When the cost of random sampling too high

7 Product sample Regional ICP product list provides the frame Your list prepared at finalisation workshops provides national sample: includes representative and available items excludes not available items – keep to minimum avoid changes after survey starts (costs/data quality) May include items not included in CPI

8 Outlet sample Regional circumstances vary enormously Geographically City states/Single state countries/Multi-state countries Available CPI infrastructure single national systems/separate provincial systems highly developed systems/simple limited-scope systems Outlet survey designs should reflect individual national circumstances Remember CPI design may not be adequate

9 Choosing outlets Must choose both location and type Location – city/rural poor province/wealthy province Type – street stall, small shop, department store Outlet choice more important for ICP Price levels differ by outlet type – cause ICP bias CPI more robust – only needs consistent movements Care to avoid price collectors taking easy options Pricing in department stores easier Risk bias if high price goods easier to measure

10 Informal markets Sampling frames may exclude informal outlets e.g. Street stalls and itinerant sellers Weekly markets may be very important and account for major part of household purchases Informal markets may require location sample Price collectors then select specific sellers Bargaining – no fixed prices Special care needed by price collectors With such markets there is risk of serious bias

11 Using CPI frame Is suitable national CPI frame available? No Supplement CPI frame No Develop new ICP frame Use existing CPI frame Yes Is a new frame required? Yes

12 Time sample Aim at average prices for the whole year Need quantity weighted transaction price Choices - Monthly/Quarterly/Annual Frequency – determined by variability Type of charge (annual, seasonal etc.)/inflation

13 Sample plan JASONDJFMAMJ Food CitiesXXXX Other urbanXXXX RuralXXXX Clothing CitiesXX Other urbanXX RuralXX

14 Multiple CPI outlet frames Multi-state countries may have many independent CPIs (eg India, China) Design of a single national ICP sample will need input from skilled sampling experts A purpose-built sample needed Outlets should be selected on PPS basis Stratified sample may be appropriate Use expenditure weights for PPS, if available

15 Alternative-frames If CPI frame not available or needs supplementing alternative frames are needed National level sampling frames May provide urban/rural, area and other broad level weights National frames may not cover outlets Local level outlet sampling frames Usually are available

16 Alternative-frame issues Is it available for statistical purposes? Is it available in the required time-frame? Is it reliable? Is it current? Does it have the required coverage? Does it include size indicators?

17 Sources of national frames Retail trade census Survey of retail sales Value Added Tax (VAT) records Business registers Telephone directories ( Yellow Pages )

18 Sources of local frames Local government records Property tax Other regulatory systems Local chambers of commerce Employer organisations

19 Retail trade census or survey Frames may exist at national level as well as local level Useful for probability proportional to size (PPS) sampling Usually maintained by the statistics office

20 Value Added Tax (VAT) VAT administrative records provide detailed lists of businesses Up to date May not be available for statistical purposes May support PPS sampling (provide size details) May exclude some sectors such as food May exclude informal sector businesses If available, care needed with exclusions May require supplementary sources

21 Business registers Business registers maintained for: Statistical purposes Administrative purposes May contain retail outlet locations/addresses May include size measures sales volume number of employees Useful for PPS sampling

22 Telephone/business directories Yellow Pages and similar directories Do not include size measures May include detailed lists of businesses May not be comprehensive PPS not possible simple random sampling can be used

23 Thank you Any questions?