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Revision of the Corporate Service Price Index (CSPI) to 1995 base

December 7, 1999
Bank of Japan
Research and Statistics Department

Click on ntcspi01.pdf (209KB) to download the full text.

The Corporate Service Price Index (CSPI) focuses on the prices of services traded among corporations, which has been published since January 1991 with a retroactive index from January 1985. The CSPI can be regarded as a counterpart of the Wholesale Price Index (WPI), which focuses on goods traded among corporations.

1. Purpose of the revision

The base year for both index and weight calculation has been updated from 1990 to 1995 to incorporate the changes in Japan's economic structure. Groupings and selection of items have also been revised to enhance the accuracy of the indexes.

The revision is conducted once every five years. This is the second revision for the CSPI, following the revision from the 1985 base to the 1990 base, which was done in 1994.

The structure of the CSPI and the base data for its weight calculation, which generally correspond to the values of the intermediate transactions in the Input-Output Tables (I-O Tables) published by the Management and Coordination Agency, are the same as before.

In reviewing the groupings and the selection of items, we have made a special effort to capture the appearance of new services and the diversification of existing services, which are brought about by the recent deregulations and technological innovations. The groupings and items have further expanded. As the variance of price movements within the same or similar services is becoming larger than before, we have also revised the price data to enhance the accuracy of the indexes.

2. Major points of the revision

(1) Increase in the number of items

(a) In the telecommunications field, where deregulations and technological innovations have brought about new services and diversified existing services rapidly, "ISDN (Integrated Services Digital Network)," "PHS (Personal Handyphone System) services" and "access charges" are newly selected. "International telex" is abolished because of the decrease in transaction value.

(b) In the miscellaneous services field, nine items as professional services, five of which are the result of the division of two existing items, are newly selected. These include "certified administrative procedures specialist services," "certified social insurance and labor specialist services" and "attorney services," etc. As other services, "linen supply" is also selected.

(c) In the financial services field, "underwriting services" and "trust business services" are newly selected by using the Consumer Price Index (CPI) as an inflator.(Note) "Securities issuance and related services" is also selected.

  • (Note) In some items such as "underwriting services," service prices are determined based on "commission rates." As commission rates themselves are the concept of percentage and cannot be regarded as "prices" to be compiled in price indexes, they are converted into a "price" basis through multiplying the rates by the appropriate price index. This price is adopted as price data for the CSPI and the corresponding price index is called an "inflator."

(2) Refinement of price data

(a) To cope with the proliferation of discount pricing systems in telecommunications services, various type of discount prices are adopted for items such as "domestic fixed telephone services" and "cellular phone services."

(b) Adoption of average prices is expanded to cope with cases when it is difficult to select a representative service for the price data.

Average prices are newly adopted for items such as "securities issuance and related services," "television commercials" and "temporary employment services."

(c) In the items of "fire insurance" and "architectural design and contract administration services," the inflator is changed from the Construction Cost Deflators published by the Ministry of Construction to the Building Construction Cost Index published by the Construction Research Institute, because the latter is more suitable for both services.

(3) Other changes

(a) The treatment of the movement of foreign exchange rates in converting foreign currency based price indexes to yen based price indexes for items such as "ocean trampers" and "ocean tankers" is changed.

Previsouly, if there were no transactions for a certain price data contracted in foreign currency in a certain survey period, then not only the "contract currency basis" indexes but also the foreign exchange rates (therefore the "yen basis" indexes) were treated as unchanged. The new treatment is that the movement of foreign exchange rates is always reflected in the conversion regardless of the existence of transactions during each survey period. As a result, even if the index for "contract currency basis" does not change, the index for "yen basis" changes because of the movement of foreign exchange rates during the survey period.

In the Wholesale Price Index (WPI) and the Input-Output Price Indexes of Manufacturing Industry by Sector (IOPI), the same method will be adopted from the data for January 2000 which will be published February 2000. (Note)

  • (Note) In the "ten-day price index" of the WPI, this treatment will start from the first ten-day index in February.

(b) Previously, the weights of services which were not selected as items in the CSPI within "other business services" and "other personal services" were imputed to "miscellaneous services" (named "other services" in the 1990 base index) and "leasing and rental." (Note) In the revised index, they are imputed only to "miscellaneous services."

  • (Note) The term "impute" means that the prices of unselected services are incorporated into the CSPI by substituting the prices of selected services. Practically, the weights of unselected services whose prices are difficult to survey are added to those of other services selected as items in the CSPI, whose price movements and characteristics seem to be similar.(c) In order to further improve the accuracy of the indexes, retroactive revision of the indexes is planned. The details, including the timing and frequency, will be announced as soon as they are decided.

This revision will also be adopted in the WPI and the IOPI.

Table of Contents

  1. Purpose of the revision
  2. Major points of the revision
  3. Detailed contents of the revision
    1. 3.1 Changes in groupings and items
    2. 3.2 Changes in weights
  4. Developments in the new and old indexes
    1. 4.1 All items and major groups
    2. 4.2 Major items
    3. 4.3 Paasche check for the 1995 calendar year average index of the CSPI (1990 base)
  1. (Appendix 1) Corporate Service Price Index Groupings, Items and Weights
  2. (Appendix 2) Changes in the names of groupings and items
  3. (Appendix 3) 1995 Base Corporate Service Price Index (from January 1995 to October 1999)
  4. (Appendix 4) 1995 Base Linked Index (from January 1985 to December 1994)Click on ntcspi01.zip (36KB[MS-Excel]) to download the (Appendix 3) and (Appendix 4).