How are the Import/Export Price Indexes constructed?
The formula used to calculate the Import/Export Price Indexes is a modified form of the Laspeyres index. A Laspeyres index uses fixed base period quantities to aggregate prices. This means that the quality of goods and services is fixed; new goods do not appear, and the prices of goods that disappear must be observable. Because these implications are not consistent with the actually workings of the economy, adjustments must be made to the index. NOTE: All Import/Export Price Index data are not seasonally adjusted. For more information: BLS Handbook of Methods, Chapter 15, International Price Indexes.
