A RESPONSE MODEL FOR THE INTERNATIONAL PRICE PROGRAM

Gwyn R. Ferguson and Tamara M. Ciapponi, Bureau of Labor Statistics1

Gwyn R. Ferguson, 2 Massachussetts Ave. NE Suite 3655, Washington, DC 20212

 

1 Any opinions expressed in this paper are those of the authors and do not constitute policy of the Bureau of

Labor Statistics.

KEY WORDS: Establishment Survey, Survey Model,

Deterioration, Non-Response

Introduction

The International Price Program is a longitudinal

establishment survey in which monthly price data is

collected for goods imported into the United States or

exported from the United States. During the survey

process, business establishments are selected and reviewed for address verification and prior survey contact. Within selected establishments, general product

categories are sampled for initiation. Unique items are

then selected within each general category during an

initiation process and the selected items are repriced

each month until they are phased out of the survey. At

each stage in processing, sample losses can and do

occur. A model of the types of sample loss at each

stage of processing has been developed. This model

provides a framework for discussing the scope of the

losses at each stage of processing. We believe that this

model is general enough to be used for most establishment surveys.

This paper will explain the types of losses which

can occur at each stage of sample processing. Some

results from recent samples will be shown and explained. We will then discuss how the information

learned from this model can be used to identify areas

where losses occur and to identify the reasons for this

loss. With this knowledge, areas where changes can be

made to survey processing to improve response rates

and increase the accuracy of the survey in future samples can be identified.

IPP Response Model

At each stage of the sample processing, the IPP

experiences losses. As shown in Figure 1, losses occur

during frame preparation, selection of business establishments, selection of product areas within each business establishment, sample refinement, initiation of

items for selected business establishment, and repricing

of the initiated items. These losses can be losses of an

entire business establishment, losses of selected

product areas within an establishment, or losses of one

or more items within a selected product area for an establishment. We will now detail these losses and explain how we classify the losses at each step.

The frame for the IPP, represented by box 1 on

Figure 1, is composed of import or export transaction

records. All records for a single business establishment are grouped to form the primary sampling units.

The records for each primary sampling unit, or business establishment, are also grouped into general product areas for the second stage of sampling. Import

business establishments are lost at this point in processing when no name or address is available for a

transaction. The units which are lost are called unidentifiable frame units while the portion of the frame

for which address information is available is referred to

as identifiable frame units, as shown in boxes 3 and 2

respectively. For exports, we do not obtain the name

and address for each transaction in the frame, so all

frame transactions are considered to be usable and

there are no losses at this stage of processing. However, we do obtain the exporter names and addresses

after the sample is selected.

From the sample frame, a sample of business establishments is chosen for each import and each export

sample as shown in boxes 4 and 5 of the model. Sample size for this process is due to the makeup of the

frame or universe of companies which trade internationally and budget constraints. The universe of companies which trade internationally is skewed and

contains a relatively small set of importers and exporters who dominate U.S. trade. The budget constraints

restrict the number of units for sampling, initiation,

and repricing.

A sample of product areas within each selected

business establishment, or secondary sampling units, is

selected as shown in boxes 6 and 7 of the model.

During this subselection process, the number of items

within each secondary sampling unit or entry level

item category which will be initiated for each establishment is also determined. The second stage sample

size or burden is determined based on the publication

needs of the Program and considers the cooperativeness of the respondent. Subselection attempts to create

a work load that will not over burden the respondent or

the initiation staff but will still ensure that the sample

generates enough items for repricing to meet publication needs for the IPP indexes. These considerations

limit the sample size and increase the sampling error.
The selected establishments and product categories

are then reviewed and refined. During this review and

refinement, two types of actions may be taken which

can cause sample losses. The first action which can

affect sample losses during the refinement occur when

an establishment is determined to be a refusal prior to

initiation as depicted in box 9. This occurs when it is

determined by historical files that the establishment is

an adamant refusal. The second action which can affect sample loss rates during the review of names and

addresses of selected establishments occurs when a

selected establishment is determined to be out of the

scope of the survey, such as a foreign government, as

seen in box 10.

Up to this point, the primary sources of loss have

been due to sampling frame errors and sample refinement. The establishments and product categories remaining after sample refinement, shown in box 8, become initiation units. The initiation process introduces

a different reason for loss, the respondent. Since the

IPP survey is a voluntary survey, the cooperation of the

respondent is crucial.

Initiation units are sent to the regional offices for

initiation. An initiation unit represents a unique address from which initiation data may be obtained.

During the initiation process, loss can occur to an entire initiation unit (i.e. primary sampling units), to

some of the selected product categories (i.e. secondary

sampling units) within an initiation unit, or to some of

the items within a product category for an initiation

unit.

Field economists contact each selected establishment in an attempt to collect data. During the initiation process the respondent may refuse to participate

any further and therefore the entire unit is a refusal, as

shown in box 12. Or, the respondent may agree to reprice one or more items but refuse to reprice others as

shown in box 15.

Out-of-Scopes also occur at initiation for a variety

of reasons such as frequency of trade, never traded, or

out-of-business. It is possible that the respondent's

trade is out-of-scope for all of the chosen product categories and therefore the entire initiation unit is out-ofscope, as depicted by box 13. However, the respondent's trade may be out-of-scope for some chosen

product areas but not for others. This situation is

included in box 16 or 18 depending on the nature of

the response for the respondent's in-scope items.

Out-of-Scope units result from problems with the

sampling frame. For example, an establishment reporting that the selected item was never traded could

result from the wrong information having been entered

on trade documents. As a result the frame shows a

company trading in the wrong product category. Outof-business units are also a frame problem. The frame

used for sampling is an average of two years old before

an establishment is initiated. In the time that has

elapsed, some companies cease to trade internationally

or go out-of-business. The age of the frame also impacts the number of companies reporting they no

longer trade in a product area. Because of the dynamic

nature of international trade, importers and exporters

often change the product areas in which they trade in

response to conditions in the international marketplace. Therefore the secondary sampling units may be

out-of-scope.

Once an item is initiated, it enters the repricing

phase where respondents are asked to provide updated

price information for each item. Reporters are sent

repricing forms each month for five years at which

time the item is phased out of the survey. During the

repricing phase, items can continue to cooperate,

become refusals, or become out-of-scope.

From this model, several measures of loss can be

computed, actual loss counts or percentages, conditional loss rates, or weighted loss rates. Actual losses

can be determined by obtaining counts of the number

of primary or secondary sampling units corresponding

to each box on the model. Loss rates can be determined by computing the percentage which each box

represents of either the entire frame, box 1, or of any of

the boxes in the model above the one being considered.

For example, the percentage of primary sampling units

from the refined sample which cooperated at initiation

can be obtained by dividing the number of units in box

11 by the number of units available for initiation in box

8. By summing the weights for the units in each box,

you can obtain total weighted loss. As with the counts,

dividing the weighted loss by any of the boxes above

that one on the model will yield the weighted loss rate

for the box in question. Conditional loss or response

rates can be computed by considering only specified

boxes in the model. For example, to obtain the refusal

rate for all in scope establishments available for

initiation, you divide the number (or total weight) of

primary sampling units in box 12 by the sum of the

number (or weight) of the primary sampling units in

boxes 11 and 12.

Results from Recent Samples

Using the response model from Figure 1, we have

analyzed the response from several recent import and

export samples. A detailed analysis of the response

data for each stage of survey processing has been performed and the results are shown below. The data represents the information obtained for import and export

samples selected using 1989 and 1990 frame data.
Together, these samples represent all the general

product areas included in IPP samples.

Table 1 shows the number of import and export

business establishments (PSUs) from the frame. Also

displayed is the loss incurred from the lack of name

and address information. Table 1 corresponds to boxes

1, 2, and 3 of Figure 1. For exports the names and addresses of the establishments are not obtained for frame

data and therefore no loss is incurred at this stage.

Table 1 shows that the number of establishments for

exports is much greater than the number of establishments for imports. This is because some transaction

records at this stage do not have establishment identifiers and each such transaction is treated as a separate

PSU. A loss of 7% of the import frame is due to a lack

of name or address information.

Table 1: Frame Loss

Frame Identifiable Unidentifiable

PSUs - Imports 282,575 93% 7%

 Exports 1,855,561 100% 0%

SSUs - Imports 982,088 96% 4%

 Exports 2,448,778 100% 0%

Table 1 also shows the number of secondary

sampling units (SSUs) that are lost due to the lack of

name and address information. Again exports have

many more secondary sampling units than imports.

The 7% of import establishments that show no name or

address correspond to 4% of the import secondary

sampling units. This would indicate that establishments which trade in fewer product categories tend to

have missing name and address information.

The next process is to select a sample of establishments. Table 2 shows the percentage of import and

export establishments that are selected to participate in

the IPP Survey and corresponds to boxes 4 and 5 in

Figure 1. Since the number of export establishments in

the frame is so large, less than one half of one percent

of the primary sampling units are selected.

Table 2: Selected Units

Identifiable Selected Non-selected

PSUs - Imports 262,652 1.75% 98.25%

 Exports 1,855,561 0.27% 99.73%

SSUs - Imports 939,958 9.72% 90.28%

 Exports 2,448,778 3.36% 96.64%

Table 2 also shows the percentage of secondary

sampling units that correspond to the selected and nonselected establishments. Over 90% of import SSUs

and 95% of exports are not selected at this stage. The

non-selected SSU percentages are lower than the PSU

percentages because the selected establishments are

generally larger and trade in more product areas than

the non-selected establishments.

The next process, subselection, samples the

product categories traded by the selected establishments and determines the number items to be initiated

within each product category. Table 3 shows the percentage of secondary sampling units that were selected

and not selected from the chosen business establishments. Table 3 corresponds to boxes 6 and 7 of Figure

1. Almost 75% of both import and export secondary

sampling units are not selected during subselection.

Table 3: Subselection

Secondary

Sampling

Units

SSUs for

Selected

Establishments

Subselected

Units

NonSubselected

Units

Imports 91,390 26% 74%

Exports 82,255 27% 72%

The final process before the initiation of the sample is to refine the sampled establishments. During

this process some establishments and their corresponding product categories are deemed refusals or out-ofscope of the survey. Establishments are refusals if

previous attempts at initiation have resulted in adamant refusals. Establishments are out-of-scope of the

survey if they are government agencies, if only a

foreign address exists for the establishment, or if no

name and address could be obtained for the selected

export establishment. Table 4, which refers to boxes 8,

9, and 10 of Figure 1, shows the establishments and

secondary sampling units that are lost during sample

refinement. Only a very small percentage of units are

lost due to refusals. Less than 9% of import

establishments corresponding to 12% of SSUs are

classified as out-of-scope during sample refinement.

Also a very small number of export establishments and

SSUs are classified as refinement out-of-scopes. For

imports the majority of the out-of-scope units have

foreign addresses. For exports, the out-of-scope units

are mostly comprised of units with foreign addresses

and units with no address.

Table 4: Sample Refinement

Selected Units Refusals OOS

PSUs - Imports 4,600 0.00% 8.50%

 Exports 5,003 0.24% 3.40%

SSUs - Imports 23,923 0.00% 12.15%

 Exports 22,747 0.43% 2.59%

During sample initiation, an establishment or primary sampling unit is assigned to a response category

through a hierarchy of the item dispositions:

Cooperation: If at least one item is cooperative,

the establishment is classified as cooperative.
Refusal: If at least one item is a refusal and no

items are cooperative, the establishment is

classified as a refusal.

Out-of-Scope: If all the items are out-of-scope,

the establishment is classified as out-of-scope.

Table 5 shows the percentage of establishments

that fall into each response category and the total number of establishments available for initiation for imports and exports. These rates were derived from data

for boxes 11, 12, and 13 of Figure 1. From Table 5 we

see that 33% of the import establishments do not have

any cooperative quotes. Similarly 41% of the export

establishments are lost during initiation. While the

percentages of loss due to refusals in both imports and

exports are almost equal, the percentage of loss due to

out-of-scopes is significantly higher for exports due

mainly to problems with the export frame data which

are detailed later in this section.

Table 5: Sampling Unit Response

COOP REF OOS Total

PSUs - Imports 67% 14% 19% 4,205

 Exports 59% 15% 26% 4,815

SSUs - Imports 38% 21% 41% 21,017

 Exports 29% 20% 51% 22,034

Table 5 also shows the percentage of secondary

sampling units for each response disposition category

and the total number of secondary sampling units in

the refined sample for imports and exports. The cooperative response rate is the number of secondary sampling units in box 14 of the model divided by the total

number of like units in box 8. The numerator for the

refusal rate is the sum of the number of secondary

sampling units in boxes 15 and 17, while the out-ofscope rate is computed based on the secondary sampling units in boxes 16, 18, and 19. While 33% of the

import establishments were lost, Table 5 shows that

62% of the selected product areas within all establishments were not initiated due to refusals or out-ofscopes. For exports 41% of the establishments were

lost and 71% of the product areas were not initiated.

Exports also have more secondary sampling unit loss

due to out-of-scopes than imports. The reason for the

large out-of-scope rate for exports will be detailed later

in the paper.

Table 6 states the explanation for the item refusals

for imports and exports. It is clear from Table 6 that

"Reporter Burden" is the main reason sited for refusing

to participate in the survey. "Reporter Burden" is sited

when the reporter states that either the number of items

requested is too large or that the amount of time required for the initiation visit or repricing is more than

the reporter can afford. “Reporter Burden” is more

prominent for importers than exporters. Situations

where the frame leads to a broker who filed the trade

documents for the reporter, but the broker does not

maintain the pricing information needed for the survey

are called “Actual Reporter not Chosen”. This

situation has a much higher frequency in exporter

samples. Other frequently reported reasons for refusing to participate in the IPP survey include the

following:

Non-Mandatory: The IPP is not a mandatory survey

requiring participation by respondents.

Confidentiality: This category is used for respondents

who are not convinced that the IPP will maintain

the confidentiality of their pricing data and refuse

to provide us with their price information.

IPP Has No Value: This category is used for respondents who do not understand the uses of the IPP

indexes or see how they can provide any useful information for the indexes.

Table 6: Refusals

Refusal Reasons Imports Exports

Reporter Burden 47% 33%

Non-Mandatory 14% 9%

Confidentiality 6% 6%

IPP Has No Value 6% 8%

Actual Reporter not Chosen 0% 14%

Other Refusals 27% 30%

Total Refusal Items above 4,396 4,301

Out-of-Scopes can be classified into four major

categories as shown in Table 7 which tallies the item

out-of-scopes for imports and exports. The main reason for out-of-scope items is "Frequency of Trade"

which is sited when the reporter states that he does not

trade any particular item in the desired product area at

least once a year. This category also includes items for

which the reporter acknowledges trading in the past

but states that the company has ceased trading. These

out-of-scopes account for 54% of all import out-ofscopes and 39% of all export out-of-scope items and

reflect the volatile nature of trade in the international

marketplace. Other frequently reported reasons for

out-of-scopes include the following:

Misclassified: The respondent states that his or her

establishment has never traded in the product area

for which data is requested.

Unrepriceable Transaction: The reporter states that

trade occurred but that the prices of the items

which were traded are not known. This situation

occurs when items are traded as part of a large

shipment composed of many items and the only
price is for the entire shipment, with no details for

individual item prices.

Out-of-Business: The IPP considers an establishment

to be out-of-business when it has physically gone

out-of-business or has ceased to trade on the international marketplace.

Table 7: Out-of-Scopes

Out-of-Scope Reasons Imports Exports

Frequency of Trade 54% 39%

Misclassified 11% 21%

Unrepriceable Transaction 16% 20%

Out-of-Business 9% 7%

Other Out-of-Scopes 10% 12%

Total Out-of-Scope items above 8,664 11,279

The establishment response of Table 5 is further

broken out in Table 8 which shows the item response

within cooperative establishments for imports and exports. Table 8 corresponds to boxes 14-16 of Figure 1.

The columns of the table are defined by the response of

the items within the cooperative establishments. For

example, in Table 8, we see that the import cooperative

establishments agreed to cooperate for 59% of the

items for which data was requested, refused for 6% of

the items, and responded that 35% of the items were

out-of-scope. Considering only the cooperative establishments, losses of 41% for imports and 49% for exports occurred at initiation. This means that almost

half of the items for cooperative establishments are lost

at this stage.

Table 8: Item Response within Establishments

Cooperative Percent of Products

Establishments COOP REF OOS Total

Imports 59% 6% 35% 15,285

Exports 51% 6% 43% 15,956

Once the initiation phase is completed for each establishment, the cooperative items for the establishment enter the repricing phase of the survey. During

repricing, the respondent is asked to provide updated

price information for each initiated item on a monthly

basis. Items are lost during repricing for three reasons,

refusals, out-of-scopes, or temporary refusals, as shown

in boxes 21, 22, and 23 of Figure 1. Items are classified as refusals when the reporter explicitly refuses to

participate in the survey. Items are out-of-scope when

the respondent ceases to trade the items internationally.

Items are classified as temporary refusals when the reporter does not respond with a usable price for a given

period but has not refused to respond permanently.

Table 9 illustrates the loss incurred during the

repricing process. The first repricing ("First Rep")

rows indicate the percentage of items that became refusals or out-of-scopes prior to actual participation in

the survey. Also displayed is the percentage of items

that were temporary refusals because the reporter did

not return a usable price during the first attempt at repricing. Table 9 shows that 2% of both import and export items were out-of-scope before ever entering the

repricing phase. The out-of-scope losses again show

the changing state of trade in the international market.

Table 9: Repricing

Imports Refusals OOS Temp. Ref. Total Loss

First Rep 0% 2% 6% 9%

One Year 2% 12% 31% 45%

Never 3% 18% 6% 26%

Exports Refusals OOS Temp. Ref. Total Loss

First Rep 0% 2% 7% 9%

One Year 1% 7% 28% 36%

Never 1% 7% 7% 15%

The "One Year" rows show the percentage of loss

incurred between initiation and a period one year after

most items for the sample were initiated. Table 9

shows that a majority of the loss at one year is due to

temporary refusals.

The "Never" rows show the percentage of items

which have never returned a usable price. These items

were cooperations at initiation yet their respondents

have never provided a price for use in index estimation. Table 9 shows that 26% of import items and 15%

of exports items have never participated in the survey.

This shows that approximately half of the IPP repricing loss is long term loss for which no repricing data

has ever been obtained.

Future Improvements and Conclusions

The results of the analysis of the IPP samples have

shown several possible areas for further research. The

International Price Program should consider research

to improve the sample frame to decrease the frame

losses as well as out-of-scope losses during the initiation and repricing phases of the sample. Some consideration should also be given to researching alternative

methodologies for decreasing the temporary repricing

losses. The model has also shown that there is a significant refusal loss during the initiation process,

especially due to respondent burden considerations.

Research should be undertaken to find methods for reducing this loss, either through sample allocation, respondent burden allocation, or alternative initiation or

repricing procedures. Improvements in any of these

areas should significantly decrease the sample loss for

future IPP samples.
The response model which has been developed can

be used to learn much information about the results

from, and yield generated by, each sample selected by

the International Price Program. Based on the information in the model, conditional response rates as well

as weighted response rates for each stage in survey

processing can also be derived. This model will be

useful for future samples as it provides a framework for

analyzing the results of each sample and comparing

the results of one sample to those of other samples.

The model is general enough that other multi-stage establishment surveys should be able to use it with only

minor adaptation. Response could then be compared

between different establishment surveys. This model

has also provided the ability to point out areas where

further research can be performed to improve the

survey.

Bibliography

CARPENTER, J. F. (1978), "Error Analysis in the International Prices Program", presented at the

ASQC Technical Conference in Chicago, Illinois

in May, 1978.

DERR, R. E. and CIAPPONI, T. M. (1992 - 1993),

"Sample Response Summary", various internal reports, Price Statistical Methods Division, Bureau

of Labor Statistics.

HESS, K. K. and CHRZASTEK, B. C. (1985), "IPP

Response Model", internal report, Price Statistical

Methods Division, Bureau of Labor Statistics.

HIDIROGLOU, M. A., DREW, J. M., and GRAY, G,

B. (1992), "Dealing with Nonresponse to Sample

Surveys at Statistics Canada", Proceedings of the

U.S. Bureau of the Census 1992 Annual Research

Conference., pp. 207 - 224.

Figure 1 -- International Price Program Response Model

(1)

Frame

(2) (3)

Identifiable

Frame

Unidentifiable

Frame

(4) (5)

Selected

Establishments

Non-Selected

Establishments

(6) (7)

Subselected

Sample

Non-Subselected

Sample

(8) (9) (10)

Refined

Sample

Refusal

Establishments

Out-of-Scope

Establishments

(11) (12) (13)

Cooperative

Establishments

Refusal

Establishments

Out-of-Scope

Establishments

(14) (15) (16) (17) (18) (19)

Cooperative

Items

Refusal

Items

Out-of-Scope

Items

Refusal

Items

Out-of-Scope

Items

Out-of-Scope

Items

(20) (21) (22) (23)

Repricing

Cooperative

Items

Repricing

Refusal

Items

Repricing

Out-of-Scope

Items

Repricing

Temporary Refusal

Items