THE INADEQUACY OF UNIT VALUE INDEXES AS PROXIES FOR CANADIAN INDUSTRIAL SELLING PRICE INDEXES.

This paper considers the adequacy of unit value indexes as proxies for industrial selling price indexes in Canada, in light of the considerations raised in the Searle report for the United States (summarized elsewhere in this issue). Some 3,237 regressions are run using the industrial selling price index for a commodity group as the dependent variable and the corresponding unit value index as the independent variable. The unit value indexes perform poorly as predictors of the I.S.P.I.; the overall tendency is for the unit value index to overestimate changes in the I.S.P.I., and to explain on average only about 30 percent of the total variance of the I.S.P.I. [ABSTRACT FROM AUTHOR]