Description of methods and sources for Albania - INSTAT

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IPA 2009 Multi-beneficiary StatisticalCooperation ProgrammeEach aggregate index (December of the previous year = 100) calculated in this wayand all other indices derived from this index and calculated with weights of theweight base period and with the same coverage of products are Laspeyres' indices offixed type.Since January 2007 indices have been linked through the new index reference periodyear 2005 (2005 average = 100). All indices are now derived and calculated throughthe 2005 average in the following ways:Monthly base index shows price changes in current month compared to theaverage of the year 2005.Jan 09 / 05 = (Jan 09 / DEC 08 DEC 08 / 05) 100Quarterly index shows price changes in current quarter compared to theprevious quarter.Q.I. 09 / Q.IV.08 = (Q.I.09 / 05 Q.IV.08 / 05) 100To provide data in the form of longer time series, the indices for the total arerecalculated and published from 1999 with new base year 2005 = 100.11.1.6 Price conceptOutput (producer) prices of manufactured goods of the domestic market are prices atwhich producers sell their products in largest quantities on the domestic market - ExWorks. The price does not include VAT (value added tax) and similar deductibletaxes and duties directly linked to turnover. The price includes rebates and discountswhich the producer approves to the buyer.Output (producer) prices of manufactured goods of the non-domestic market areprices at which producers sell their products in largest quantities in foreign markets.The price does not include VAT (value added tax) but includes rebates and discountswhich the producer approves to the buyer.Reporting units give the price in the currency in which the transaction wasconducted. For calculating the index, the prices, which are not in EURO, areconverted into the national currency on the basis of the reference exchange rate ofthe European Central Bank on the 15th (or 16th) day of the month.11.1.7 Base price periodPrices of the base period are the basis for a comparison with the prices of the currentperiod. The price base period is December of the previous year.11.1.8 The weighting systemThe output price index is a combination of the output price index of the domesticmarket and the output price index of the non-domestic market.The weighting system is designed on the basis of the 2005 structure of sales value ofmanufactured goods on the domestic market and on foreign markets on a separate136/236
IPA 2009 Multi-beneficiary StatisticalCooperation Programmebasis. The basic source of data is annual structural survey. In designing the weights,SBS- sales value data are recalculated on December 2008 by producer price indicesDecember 2008 / 2007. Weights are changed every year.11.1.9 Quality AdjustmentsWhen speaking about quality adjustments one usually refers to the whole concept ofitem replacement. There are a lot of methods for handling the replacement; here wewill look at a few of them. The choice is in most case dependent of what data isavailable. Mainly there are two categories:Explicit valuationImplicit valuationExplicitWhen doing explicit quality adjustments one needs to quantify the quality differencein terms of price. For PPI, as it is an output price index, the preferred way to doquality adjustments is by adjusting for differences in production cost.The quality adjustments in the index should be done by adjusting the base price(December previous year).ImplicitWhen using implicit methods for item substitution one does not have to estimate thedifference in quality in terms of price. Instead you rely on “the law of one price”,stating that all differences in price at a given point in time are due to differences inquality. This might not seem like a truth in many cases and it is probably not (it liesin the assumptions of a fully competitive market). However, having nothing else torely on, the “law of one price” might be acceptable to use when substituting items forthe same establishment within the same product group.11.1.10 PublicationThe PPI is published on 5 th of each quarter for the previous quarter.The following publications include PPI and are regularly published. Quarterly publication “Producer Price Index Quarterly bulletin “Statistics” In “Statistical Yearbook”.On the website of INSTAT, www.instat.gov.al., at the 8 th of each quarter11.2 Consumers’ Price Index (CPI)11.2.1 General backgroundThe Consumers’ Price Index (CPI) measures the change of the prices of a fixedbasket of goods and services from base period to the current period. The base periodis now December 2007 and will be changed in the next base revision.137/236
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