Producer Price Index (PPI) measures the average change in the price of goods and services either as they leave the place of production, called output PPI or as they enter the production process, called input PPI.
PPI estimates the change in average prices that a producer receives.
PPI Vs Wholesale Price Index (WPI)
PPI is different from WPI on following grounds:
▪️WPI captures the price changes at the point of bulk transactions and may include some taxes levied and distribution costs up to the stage of wholesale transactions.
▪️PPI measures the average change in prices received by the producer and excludes indirect taxes.
▪️Weight of an item in WPI is based on net traded value whereas in PPI weights are derived from Supply Use
▪️PPI removes the multiple counting bias inherent in WPI.
▪️WPI does not cover services and whereas PPI includes services.
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