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Producer and International Trade Price Indexes: Concepts, Sources and Methods
Reference period


The process of combining lower level data or price indexes to produce higher level data or indexes within a structure.

Basic Price

The basic price is the amount receivable by the producer from the purchaser for a unit of a product produced as output, minus any tax payable, plus any per unit subsidy receivable on that unit as a consequence of its production or sale.


A commonly used term for the products (goods and services) priced for the purpose of compiling a price index.


A systematic error in an index. Bias can arise for a number of reasons, including the design of the sample selected, the price measurement procedures followed, or the index number formula employed.

Chain linking

Joining together two indices that overlap in one period by rescaling one of them to make its value equal to that of the other in the same period, thus combining them into single time series. Also known as chaining.


A level of aggregation of like products in a price index. It can be either a set of specifications linked to a component or a set of components linked to higher level components.

Elementary aggregate

The lowest level of product classification in ABS price indexes and the only level for which index numbers are constructed by direct reference to price data.

Fixed weight index

A price index in which the weighting pattern is fixed for the life of each index series.

Goods and Services Tax (GST)

An ad valorem tax applied to supplies (products produced or delivered) by registered suppliers engaged in taxable activity. The GST is effectively paid only by final consumers. The current legislated rate of GST is 10%.

Implicit Price Deflator (IPD)

Within the system of national accounts. An implicit price deflator is obtained by dividing a current price value by its real counterpart (the chain volume measure). When calculated from the major national accounting aggregates such as GDP, IPDs relate to a broader range of products in the economy than that represented by any of the individual price indexes (such as CPI and PPIs).

Movements in an implicit price deflator reflect both changes in price and changes in the composition of the aggregate for which the deflator is calculated.

Index points change

The change in an index number series from one period to another expressed in terms of the difference in the number of index points in each of the index numbers.

Index points contribution

A quantitative expression of how much each component contributes to the magnitude of the All Groups index number.

Index number series

A series of numbers measuring the change over time from a reference period value, which is normally presented as an index value of 100.0.

Index reference period

The period for which the index is set to 100.0. The PPI reference period is currently set to 2011-12. The reference period should not be confused with the weighting period (see Weight reference period below).


The periodic adjustment of a money value according to changes in a price index.

Inflation (deflation)

A term commonly used to refer to changes in price levels. A rise in prices is called inflation, while a fall is called deflation.

Input-Output table

A national accounts Input-Output table provides a means of presenting a detailed analysis of the process of production and the use of products and the income generated in the production process.

Input price index

Input price indexes measure the average change in the prices of products used in the production process. These products are produced elsewhere in the domestic economy, or are imported.

Jevons price index

A price index defined as the unweighted geometric average of the current to reference period price relatives. It is an elementary index.

Link factor

A ratio used to join a new index series to an old index series to form a continuous series.

Link period

The link period is the period in which the index is calculated on both the old weights and structure and the new weights and structure.


The technique used to join a new index series (e.g. one having a changed composition and/or weighting pattern) to an old index series to form a continuous series. The technique ensures that the resultant linked index reflects only price variations and that introducing the new products and/or weights does not affect the level of the index.

Matched Sample

In a matched sample, products that are priced from period to period are identical in all respects.

Non-market activities

Activities covering products that producers supply to others for free or at prices that are not economically significant.

Non-probability sampling

Non-probability sampling is also known as judgmental or purposive sampling, or expert choice. In a price indexes context this involves index compilers selecting producers and products from which to obtain prices using available information on the relative importance of individual producers and products.

Output price index

Output price indexes measure the prices received by producers irrespective of whether their products are sold on the domestic market or as exports.

Percentage change

The change in the level of an index series from one period to another expressed as a percentage.

Price index

A composite measure of the prices of products expressed relative to a defined reference period.

Price levels

Actual money values in a particular period of time.

Price movements (or price changes)

Changes in price levels between two or more periods. Movements can be expressed in money values, as price relatives or as percentage changes.

Price reference period

The period whose prices are used as denominators in the elementary index calculation. This period can vary from component to component and may be updated when sample maintenance is undertaken.

Price relative

The ratio of the price level in one period to the price level in an earlier period.

Producers' price

The producers’ price is the amount receivable by the producer from the purchaser for a unit of a product produced as output, including any tax that is incorporated within the sales price and excluding any subsidy that reduces the sales price, on that unit as a consequence of its production or sale.


Businesses, government agencies etc. from which prices data and associated information are collected for use in compiling the PPIs and the ITPIs.

Purchaser’s price

The amount paid by the purchaser inclusive of any non-deductible taxes on products, transport and trade margins.

Quality adjustment

The elimination of the effect that changes in the quality or composition of a product have on the price of that product in order to isolate the pure price change.

Quantity weights

Weights defined in terms of physical quantities, such as the number or total weight of goods or the number of services.

Regimen level

The selected generic products of which a sample will be priced for the purpose of compiling a price index.


A representative selection of products to be priced.

Seasonal products

Products that are only available, or available in much greater supply, at certain times of the year.

Spatial price indexes

Indexes that compare the relative differences in prices between geographic locations at the same point in time.


Detailed description of the characteristics of a product to be priced.


A technique used to introduce new products or providers into the index calculations so that the level of the index is not affected.

Superlative index

A superlative index is one of a small group of indexes that makes use of prices and quantities. Quantities are treated in a symmetric manner in each pair of periods under observation. Examples are the Fisher Index and the Tornqvist Index. Superlative indexes require both price and expenditure/quantity data for all periods.

Temporal price index

Index that measures price change over time.

The New Tax System

Package of changes to the taxation and social welfare system including the introduction of GST and the changes to business taxation announced in response to the review of business taxation.

Transaction price

The price actually paid by a purchaser of a product - as opposed to a list price or quoted price.


Often defined as the satisfaction derived from consumption the of a product.

Value aggregate

The current cost in dollars of purchasing (or revenue received from selling) the same quantity of products as was purchased/sold in the weight reference period.

Value data

Value data are revenue data for an output index and expenditure data for an input index.


The measure of the relative importance of a product in the index regimen relative to the other products. Weights can be expressed in either quantity or value terms. Value weights are used by the ABS in compiling all official price indexes.

Weight reference period

The period to which the fixed quantity weights relate.

Weighted average

An average that is obtained by combining prices or price indexes according to the relative importance of each component.

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