Statistical Terms Glossary

The process of establishing a market price at which demand and supply for an item are matched. By bringing buyers and sellers together and making the process transparent, financial markets facilitate price discovery.

Price discrimination occurs when customers in different market segments are charged different prices for the same good or service, for reasons unrelated to costs. Price discrimination is effective only if customers cannot profitably re-sell the goods or services to other customers.

The price of a company's stock divided by its previous year's earnings

A Price fixing agreement is an agreement between sellers to raise or fix prices in order to restrict inter-firm competition and earn higher profits. Price fixing agreements are formed by firms in an attempt to collectively behave as a monopoly.

A price index reflects an average of the proportionate changes in the prices of a specified set of goods and services between two periods of time.

The method with which pension benefits are adjusted taking into account changes in prices.

Price leadership refers to a situation where prices and price changes established by a dominant firm, or a firm are accepted by others as the leader, and which other firms in the industry adopt and follow. When price leadership is adopted to facilitate collusion, the price leader will generally tend to set a price high enough that the least efficient firm in the market may earn some return above the competitive level.

Actual money values in a particular period of time.

Changes in price levels between two or more periods. Movements can be expressed in money values, as price relatives or as percentage changes.

The price collected or reported for a sampled product or item.

The prices of a period with which prices the prices in the current-period are compared. The period whose prices appear in the denominators of the price relatives.

Price regulation refers to the policy of setting prices by a government agency, legal statute or regulatory authority. Under this policy, minimum and/or maximum prices may be set.

A price relative is the ratio of the price of a specific product in one period to the price of the same product in some other period. In purchasing power parity (PPP) comparisons a price relative refers to the ratios of the same product in two countries.

A test that may be used under the axiomatic approach which requires that the quantity index remains unchanged after the price vectors for the two periods being compared are interchanged.

The similarity of the structure of prices between any pair of countries is measured by the correlation coefficient that is obtained by regressing the internal price structure of one country against the corresponding internal price structure of the other country. Internal price structures can be expressed as a vector of the ratios of product prices to the price of a reference product.

See vertical spread.

The maintenance of price stability is the primary objective of the European Central Bank (ECB). The Governing Council has published a quantitative definition of price stability in order to give clear guidance to expectations of future price developments. The Governing Council defines price stability as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.

A matrix of prices for a detailed category in which the rows represent different items and the columns the various countries.

Undertaking by an exporter to raise the export price of the product to avoid the possibility of an anti-dumping duty.

A procedure whereby the quantities in the weight reference period are revalued at the prices of a later period that serves as the price reference period, typically the period preceding the current period. In other words, revaluing the weights in order to ensure that they are effectively based on the underlying quantities or volumes of the price reference period.

Market price per ordinary share divided by earnings per ordinary share after tax. It expresses the market value placed on the expectation of future earnings.