Instituto Brasileiro de Geografia e Estatística

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System of Consumer Price Indices

National System of Consumer Price Indices

Technical Note - 01/2000

Alteration in the Collection Methodology of New Motor Vehicles

The price change of “new motor vehicles” in the National System of Consumer Price Indices had been estimated based on the price tables of the automotive manufacturers, though the price effectively charged to consumers is the one practiced by the retailers.

For the production of Consumer Price Indices, it is necessary to monitor the price change of a fixed set of products along a period of time. As the retailers were not able to keep a fixed set of products, the tables from the manufacturers were used for the purpose of monitoring.

However, the constant concern with the improvement of indices led IBGE to reconsider price collection from the retailers. The following table presents the weights of “new motor vehicles”, obtained from the Consumer Expenditure Survey of 1996.

Weights (%) of new motor vehicles, Brazil and surveyed areas

INPC and IPCA - July of 2000
Brazil/Areas INPC IPCA
Brazil 0.14 3.69
Rio de Janeiro 0.54 3.29
Porto Alegre 0.18 2.50
Belo Horizonte - 3.66
Recife 0.28 1.60
São Paulo - 4.82
Brasília - 2.40
Belém - 1.44
Fortaleza - 2.24
Salvador - 2.48
Curitiba 0.37 4.31
Goiânia 0.46 4.97

Source: IBGE, Directorate of Surveys, Department of Price Indices, National System of Consumer Price Indices.

In the meeting of December of 1999, IBGE informed the Consulting Council of the National System of Consumer Price Indices about a test of price collection from the retailers. When the list of places and products for the 11 surveyed areas was ready and the questionnaires were released, the collection was made in four months (April to July of 2000).

The test revealed that the prices of the retailers result from the following equation: prices of the manufacturers plus freight costs minus bonuses suggested by the manufacturers and discounts defined by the retailers. With that formula, IBGE identified that manufacturers’ price level and change tend to be different. No bias (difference between the results of the two collection modes persisting in the same direction) was observed, neither for the price level nor for the price change in the comparison between retailers and manufacturers in the 11 areas.

The requirement of permanence of the same products for a continuous collection, which made IBGE work only with the manufacturers’ prices in the past, was not an obstacle this time.

Having analyzed the test results in the meeting of August 25 of 2000, the Consulting Council of the National System of Consumer Price Indices finally recommended the price collection of "new motor vehicles" from the retailers.

As a result, IBGE defined that the change of “new motor vehicles” relative to the IPCA and INPC of September, to be released on October 11, would be calculated by using the prices collected from the retailers.