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The ABS has traditionally published separate consumer, producer and international trade price indexes, each relating to a particular segment of economic activity. Information Paper: An Analytical Framework for Price Indexes in Australia (cat.no.6421.0) presented a proposal to enhance the analytical value of this information through drawing the series together, augmenting them with new data, and presenting them as a system of indexes designed to support the study of inflation.
This system is based on a market transactions approach which excludes transactions at prices that are not market determined, along with notional transactions such as the national accounts imputed dwelling rent.
Following extensive user consultation, the ABS commenced constructing the new indexes proposed in the analytical framework paper. This present information paper releases experimental index numbers for the new economy-wide Price Index of Domestic Final Purchases, representing the last major element of the system of indexes.
The Wage Cost Index (introduced in 1998), Producer Price Indexes for Selected Service Industries and Stage of Production Producer Price Indexes (both introduced in 2000), together with the long standing Export Price Index, represent the other major elements of the system of indexes, providing complementary views of the economy.
This paper describes the conceptual basis of the Domestic Final Purchases (DFP) index, and each of its components, and outlines its relationship to other price indexes, including the newly developed Stage of Production producer price indexes and the Consumer Price Index.
The DFP index has been constructed as an experimental measure, with the index items and weights derived from an analysis of detailed 1994-95 input-output tables. The use of the input-output system as the weighting data source provides the potential for regular chaining of the index once in production mode.
Index series have been compiled on a quarterly and annual basis commencing with September quarter 1996 and are presented in tables 9.1 and 9.2. An analysis of the new index and comparisons with other related indexes are then provided.
The compilation of the experimental indexes largely involved drawing on price data used in existing ABS price indexes. In the case of capital purchases, there may be data quality limitations associated with the use of proxy price series for some items which are not on the correct pricing basis.
Free version of Information Paper: Price Index of Domestic Final Purchases, Australia (cat. no. 6428.0) Acrobat (.pdf) file
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