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CHAPTER 8 – PRICE COLLECTION
8.4 When a job is paid by piece rates, i.e. paid a set amount per unit produced, an hourly rate is determined after consultation with the business contact about the rate per piece and the average number of pieces per hour. The average hourly rate is calculated when the job is first selected and it becomes part of the pricing specifications for the job and is priced from quarter to quarter. In subsequent quarters, any changes to the piece rate are collected, so that the percentage change is calculated and applied to the previous quarter's hourly rate.
8.5 The ABS takes a number of steps to ensure that data from the same jobs are collected each quarter, and that any changes in price for the job between quarters relate to pure price change. Where necessary, ABS survey staff contact businesses by telephone and seek clarification from the data provider on information supplied on the form. This contact with businesses enables survey staff to determine whether the change in price was due to factors other than market forces, such as a change in the pricing specification, changes in the characteristics of the job occupant, or a new occupant being in the job.
8.6 Sometimes it is not possible to collect data for all of the selected jobs. Some jobs may be temporarily vacant or the required information is simply not provided by the employer (although this is rare). There are a few options available to deal with temporarily missing observations. These include:
8.7 The procedure most commonly used in the WPI is to impute a movement for the missing job based on the price movements of the other jobs in the sample. The implicit assumption behind this procedure is that if it had been possible to collect the price of this job, its price would have changed in line with similar jobs. In most cases, this is a reasonable assumption and will provide an acceptable outcome for the index. However, this method is inappropriate when a job has no close substitutes. In these cases, a more appropriate method of imputation is to repeat the previous price.
8.8 Rigorous quality assurance processes are applied to the WPI data. These procedures are in place to ensure that the price change data supplied by businesses are accurate, and that the index numbers that are produced reflect changes in the real world. More detail on the types of price changes that are subject to these processes are provided in Chapter 9.