Revision of the Wholesale Price Index
(Switchover to the 2000 Base Corporate Goods Price Index <CGPI>)
December 9, 2002
Bank of Japan
Research and Statistics Department
1. Purpose of the revision
The Bank of Japan has revised the 1995 base Wholesale Price Index (WPI) into the 2000 base Corporate Goods Price Index (CGPI).
This revision is intended to improve the precision of the price index by incorporating the structural changes in the Japanese economy over the past five years, especially radical changes surrounding prices such as the diversification of commodities and their prices.1 It is also aimed at reducing the burden on correspondent companies who cooperate with the CGPI price survey. Thus, the 2000 base CGPI has become the most aggressive revision in 20 years.
- From this point of view, the "utilization of provisional prices" and the "periodic retroactive revision of published indexes" were introduced from October 2001. These were adopted a part of the WPI revision concept released in September, and made in advance of this time index revision.
1.1. Improvement of statistical precision
First, the selection of commodities in the price index has been reviewed (e.g., expansion of newly selected commodities). Second, the base year for both the index and the weight calculation has been updated from 1995 to 2000. The aims of these changes are to incorporate the structural changes in the Japanese economy over the past five years since the previous index revision and to improve the statistical precision of the price index.
In addition to these ordinary revisions of the index, the following improvements have been made.
- (1) In order to cope with the diversification of commodities and their prices without imposing an excessive burden on the price survey correspondent companies, the CGPI sample prices have been comprehensively reviewed. Accordingly, the number of sample prices has been considerably increased and "averaged prices," which are sales divided by the number of units, have been introduced. The averaged prices adopted by the CGPI are the surveyed prices of narrowly defined commodities or commodity groups of constant quality.
- (2) The commodities to which the hedonic regression method is applied for the quality adjustment of prices have been expanded. This further improves the quality adjustment method for IT-related products, whose commodity cycles are brief and whose quality improves rapidly along with technological innovations.
- (3) The "Domestic Corporate Goods Price Index using chain-weighted index formula" has been introduced as a Reference index to complement the Basic grouping index, which is compiled using the Laspeyres formula based on the fixed value-based weights for the base period. The "Domestic Corporate Goods Price Index using chain-weighted index formula" was introduced for the purpose of grasping the impacts of changes in Japan's economic structure which are expected to occur over the next five years, by the time of the next revision of the CGPI.
1.2. Publication changes
Because of the increase in the number of sample prices and the introduction of "averaged prices," correspondent companies are expected to submit their price correction data later than under the previous index. Accordingly, the release date will be moved, in principle, from the "sixth working day of the following month after the index is compiled" to the "eighth working day of the following month after the index is compiled." Additionally, a new publication system of releasing both preliminary and final figures has been adopted. The preliminary figures will be released the following month after the index is compiled, and the final figures will be released two months after the index is compiled based on revisions to the preliminary figures.
1.3. Change of the name of the index
The criteria for price survey stage selection in distribution processes have been modified for the purpose of improving the usage of deflators within the scope of the index's primary principle, which is "to survey transaction stage prices which most sensitively reflect the supply and demand conditions of individual goods." Consequently, the name of the index has been changed from the "Wholesale Price Index (WPI)" to the "Corporate Goods Price Index (CGPI)," mainly because the percentage of prices surveyed at the production stage has been increased from that under the previous index.2
- 2The name of the index has been changed to the "Corporate Goods Price Index" because this name better reflects the character of the index compared with the previous name "Wholesale Price Index." The index remains focused on the prices of goods traded among companies.
- 1. Purpose of the revision
- 1.1. Improvement of statistical precision
- 1.2. Publication changes
- 1.3. Change of the name of the index
- 2. Detailed contents of the revision
- 2.1. Comprehensive revision of selected commodities
- 2.2. Update of the base year for both the index and the weight calculation
- 2.3. Review of sample prices
- 2.4. Improvement of the quality adjustment method for IT-related products (servers)
- 2.5. Newly adopted Reference indexes which complement the Basic grouping index
- 2.6. Modification of other indexes in accordance with the switchover of the WPI into the CGPI
- 3. Publication changes
- Appendix 1: Changes in the Number of Commodities
- Appendix 2: Changes in Commodities (Reference) Changes in Commodity Class Categorization
- Appendix 3: Transaction Values and Weights
- Appendix 4: Number of Sample Prices
- Appendix 5: Number of Sample Prices by Averaged Prices Fixed Condition Type
- Appendix 6: Sample Prices Surveyed Stages
Click on ntcgpi01.zip (90KB[MS-Excel]) to download the Figures.*
- 1. 2000 Base Corporate Goods Price Index (from January 2000 to September 2002)
- 1.1. Domestic Corporate Goods Price Index
- 1.2. Export Price Index
- 1.3. Import Price Index
- 1.4. Index by Stage of Demand and Use
- 2. Linked Index of 2000 Base Corporate Goods Price Index
- 2.1. Domestic Corporate Goods Price Index
- 2.2. Export Price Index
- 2.3. Import Price Index
- 2.4. Index by Stage of Demand and Use
- Please open this file using MS-Excel version 97 or higher.