RDP 9707: Internationalisation and Pricing Behaviour: Some Evidence for Australia Appendix C: Data Sources and Description

C.1 Section 3 Data Sources

C.1.1 Price ratio

The price ratio is calculated:

where p_i,t is the Australian price index, the weighted-average foreign price index in Australian dollars, and tariff_i,t the average tariff rate, for ISIC class i in period t.

Australian data – price indices

Annual data from 1969 to 1994 are calculated by splicing UNIDO data for the period up to 1976 to ABS data for 1975/76 to 1993/94. Data are disaggregated into 27 three-digit ISIC classes within the manufacturing sector. See Table C1 for a list of the classes and a concordance between ISIC classes (according to which UNIDO data are classified) and IOCC classes (according to which ABS data are classified).

UNIDO price indices are calculated for each industry by dividing the nominal gross output series by the index of industrial production.

The UNIDO data are adjusted for: the 1990 series break for ISIC class 353 (petroleum refineries) which has been attributed to a change in the accounting practices of the petroleum industry; and for the fact that industrial production data for most industries appear to have been allocated to a year earlier than they should have been. Two classes, ISIC 353 (petroleum refineries) and 354 (miscellaneous products of petroleum and coal) are combined by summing their nominal gross output series; the industrial index series provided is common to the two classes.

ABS producer price indices for the period 1975/76 to 1993/94 were supplied for 109 input-output industries, based on the Australian input-output classification code (IOCC). These data are unpublished. IOCC classes are aggregated, where necessary, into ISIC classes by weighting together individual indices using shares of gross product from 1989/90 input-output tables. Annual averages of quarterly data are calculated.

Sources: UNIDO Industrial database; ABS unpublished data; ABS Cat. No. 5209.0

Australian data – average tariffs

Total duty paid on imports as a proportion of the total value of imports is used as a measure of average tariffs. Three- and four-digit ASIC data on duty paid and value of imports are matched with ISIC classes using concordances in Table C1. Tariffs in 1993/94 were set equal to the previous year's value as the tariff data only extend to 1992/93.

Source: Industry Commission (1995)

Foreign data – price indices

Foreign price data for fifteen of Australia's top trading partners are used. Countries included are: Canada, France, (West) Germany, Indonesia, Italy, Japan, Korea, Malaysia, the Netherlands, New Zealand, Singapore, Sweden, Taiwan, the UK and the US. After 1990, the German data relate only to the former West Germany. The foreign country data are provided on a calendar year basis.

For each industry in each country, a price index for 1969 to 1994 is constructed from UNIDO data by dividing the nominal gross output by the index of industrial production. These indices are converted into Australian dollars using bilateral exchange rates (see below). To obtain a single foreign price index, the individual country indices expressed in Australian dollars are chain-weighted together using the formula:

where

and p_c,i,t is the price index, in Australian dollars, of country c for industry i in time t; and w_c,i,t is country c's weight for industry i in time t.

Foreign country weights for each ISIC class are five year moving averages of each country's share of exports in that ISIC class to Australia. The export data are supplied by UNIDO, and are only available for 1970 to 1994. As such, the weights for 1969 to 1974 are fixed at the 1974 moving average value, subject to normalisation for missing price data.

The foreign price data are also adjusted for breaks in the nominal gross output series for the Netherlands (in 1981) and the UK (in 1992).

Source: UNIDO Industrial database

Foreign data – exchange rates

For all countries except Taiwan, average bilateral exchange rates for each year are calculated by averaging IFS monthly average exchange rates. To match the UNIDO data, for all countries except New Zealand, the exchange rate is calculated for the calendar year; for New Zealand the fiscal year is used. The Taiwanese exchange rate is taken from Monthly Bulletin of Statistics for 1969 to 1973 and Financial Statistics for 1974 to 1994.

Sources: IMF International Financial Statistics; Monthly Bulletin of Statistics, the Republic of China, (produced by the Directorate-General of Budget, Accounting and Statistics); and Financial Statistics, Taiwan District, the Republic of China.

C.1.2 Import share

Measured by the ratio of world exports to Australia as a proportion of total supply of the good:

where is world exports to Australia of goods from industry i in year t, and Q_t,i is the Australian gross output of industry i, in year t.

Source: UNIDO Industrial database

C.1.3 Concentration measures

The concentration of each ISIC class is measured by a Herfindahl index calculated for 1987/88:

where N_i is the number of firms in the ith enterprise group, T_i is the combined turnover of firms in the ith enterprise group, and T_T is the total turnover of all firms in the ISIC class. The ABS data, grouped by ASIC class, are concorded to ISIC classes using concordances in Table C1.

Source: ABS Cat. No. 8207.0

C.2 Section 4 Data Sources

C.2.1 Aggregated data

Tradeables and non-tradeables producer price indices

Chained tornqvist indices of tradeable, importable and non-tradeable producer prices, presented in Johnson (1996). An industry is defined as tradeable if either its import share or export share is greater than 10 per cent.

Source: ABS unpublished data

Import prices

Implicit price deflator of total imports, f.o.b.

Source: ABS Cat. No. 5302.0

C.2.2 Disaggregated data

Australian domestic prices

Quarterly domestic prices obtained from the ABS for 109 input-output industries. These are aggregated to match the import data for 30 import-competing industries. See Table C2 for a list of the industries included and concordance between IOCC and SITC classifications. Shares of gross product from 1989/90 input-output tables are used to weight producer price series together where required.

Sources: ABS unpublished data; ABS Cat. No. 5209.0

Import prices

Quarterly import price indices at two- and three-digit SITC levels obtained from the ABS. For some categories, these are aggregated to match the domestic price data (see Table C2). Proportions of the value of imports for 1988/89–1989/90 are used to weight import price indices together where required.

Source: ABS unpublished data; ABS Cat. No. 5426.0, Table 2

Import share

As defined in C.1.2 above. Ratios are constructed from three- and four-digit ASIC data, aggregated to match the domestic price series using concordances in Table C2.

Source: Industry Commission (1995)

Tariffs

Quarterly duty and import data for March 1983 to June 1996 are provided by the ABS at the four-digit ASIC level. These are aggregated to match the industry breakdown using concordances in Table C2.

Source: ABS unpublished data