Description

This paper presents a methodology developed by the Central Bank of Chile to calculate unit value indexes for exports and imports of goods. The methodology was applied to data from 2003 onward, and the results were first released in May of 2005, when a quarterly series starting in 1996 was published. The series was constructed by linking the values obtained from the application of the new methodology, to the official values calculated for the 1996 – 2002 period according to the previous methodology.

The new methodology introduces a Laspeyres index - the previous methodology was based on Paasche indexes - in which the weights of prices (unit values) are the volumes of a moving base year. The resulting yearly variations are linked, thus constructing a fixed base index. This procedure allows the weights to be adjusted yearly, and therefore, avoids a possible loss of relevance, which is particularly important in the case of imports, which undergo frequent changes. The new methodology also introduces important changes in the use of statistical techniques to improve the quality of the basic data in two areas: the minimization of distortions due to erroneous data, and the application of sampling techniques to improve intertemporal comparability of imports.

The literature reviewed for this project shows that there is no single way to approach the calculation of these indexes. The choice of a certain methodology depends on the characteristics of the basic data, of the human and technical resources available, and of the specific uses of the index. Nonetheless, the methods chosen for calculating foreign trade indexes in Chile are similar to those applied by other statistical offices.