Measuring Export Price Movements with Administrative Trade Data

The International Price Program (IPP) surveys establishments to collect price data of merchandise trade and calculates import and export price indexes (MXPI). In an effort to expand the quantity and quality of MXPI, we research the potential to augment the number of price indexes by calculating thousands, and potentially millions, of prices directly from export administrative trade transaction data maintained by the Census Bureau. This pilot research requires reconsideration of the long-held view that unit value price indexes are biased because product mix changes account for a large share of price movement. The research addresses this methodological concern and identifies others by analyzing two semi-homogeneous product categories among the 129 5-digit BEA End Use export categories. The results provide a road map of a consistent and testable approach that aligns with the concepts used in existing MXPI measures, maximizes the use of high volume data, and mitigates the risk of unit value bias. The authors then propose one methodological approach and compare more than a dozen indexes constructed with the methodology against the published IPP export price index benchmarks. Preliminary analysis of all 129 5-digit BEA End Use categories for exports shows potential for calculating export price indexes for 50 of the 5-digit classification categories, of which 21 are currently not published.