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CONSTANT PRICES

Statistics Directorate    
French Equivalent: Flux en termes réels

Definition:
Constant prices are obtained by directly factoring changes over time in the values of flows or stocks of goods and services into two components reflecting changes in the prices of the goods and services concerned and changes in their volumes (i.e. changes in “constant price terms”); the term “at constant prices” commonly refers to series which use a fixed-base Laspeyres formula.

Context:
The volume measure of GDP is frequently referred to as "GDP at constant prices". When time series are constructed by multiplying the values of the base year by fixed base Laspeyres volume indices, it is appropriate to describe the resulting series as being at the constant prices of the base year. However, when the values of the base year are extrapolated by multiplying them by annual chain volume indices it is no longer strictly correct to describe them in this way. Nevertheless, the series of values are expressed at the general price level of the base year and it is convenient to continue to describe them as being "at constant prices" (SNA 16.2. 16.71).

A stock of assets is expressed at constant prices when all members of the stock are valued at the prices of a single base period. (Measuring Capital: OECD Manual, Annex 1 Glossary of Technical Terms Used in the Manual, OECD, 2001)

A valuation expressed at the prices prevailing during a fixed reference or base period (Chain Fisher Volume Index, Glossary - Statistics Canada. Available at http://www.statcan.ca/english/concepts/chainfisher/glossary.htm#index).

Source Publication:
SNA 16.2, 16.71.

Cross References:
Gross domestic product – constant prices

Hyperlink:
http://esa.un.org/unsd/sna1993/introduction.asp

Statistical Theme: Methodological information (metadata)

Created on Tuesday, September 25, 2001

Last updated on Monday, March 03, 2003