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Prices and Consumption, Economic Statistics
Peter Fink-Jensen
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Producer price index for renovation and maintenance

The statistics is based on 3,000 prices from six craftsman trades. Prices are reported by businesses, which are selected according to turnover to achieve the highest possible coverage. As there are large differences between the trades, they are treated separately with separate samples. It is estimated that each trade has a coverage of at least 30 pct., and that the price development in each sample represents the development in the population at large.

As the samples are not randomly selected the sampling error cannot be measured. However, overall, the index is assessed to be of high quality.

Overall accuracy

The producer price index for renovation and maintenance is based on 3,000 prices from six activity groups (electrical installation, plumbing, heat and air-conditioning installation, carpentry, painting, roofing and bricklaying). For each trade the largest businesses, according to turnover, are selected for reporting using a top-down approach to achieve the highest possible coverage. For each trade there is a coverage of at least 30 pct. Price developments from the larger businesses weigh more than price developments from smaller businesses. Each of the businesses are requested to select their most representative activities, i.e. the services sold most often within a given trade.

The yearly non-response rate is minimal and is not considered to be a significant source of error. It is thus assumed that the price development in the sampled businesses represents the price development of the entire population within each trade.

The weights used for calculating the index is based on information from the Danish Technological Institute about the refurbishment and maintenance activities performed by construction and craftsmanship businesses.

Sampling error

The sample for each industry for the producer price index for refurbishment and maintenance are collected to achieve as high turnover coverage as possible. As the sample is not selected randomly, a measurement of sample error cannot be made. The collected prices represents the prices on unique activities which are used in a weighted aggregation of the index. The sample error is therefore only related to the possibility that the sample population experience a different trend in the price development than the total population. This issue is not expected to be a significant problem.

Non-sampling error

The statistics is based on 3,000 prices for six trades within the construction industry. The statistics is calculated using the construction tasks and their respective prices reported by the businesses. All tasks represent activity codes selected within each trade. For each activity code the coverage is deemed to be sufficient to ensure representativity for the refurbishment and maintenance tasks to be measured in the index. It is estimated that only in very limited instances do the reported prices cover beyond what is asked for.

There is a risk that the reporting businesses incorrectly keep their price for a given renovation activity fixed over a longer period of time. These types of issues are alleviated by continuously investigating whether prices, that have remained fixed for the past 13 months, and then contacting the reporting businesses in question.

Measurement error can occur if the reporting units make mistakes during the reporting or if the have difficulties when pricing their activities. Mistakes are corrected if found by Statistics Denmark, whilst the reporting businesses are asked to give their best estimate of the price as they are the ones who have the best prerequisites for doing so. This is not considered to be a significant source of error.

Index calculation is automated and performed in a dedicated index calculation system. Therefore, the possibility of calculation errors is considered to be insignificant.

Quality management

Statistics Denmark follows the recommendations on organisation and management of quality given in the Code of Practice for European Statistics (CoP) and the implementation guidelines given in the Quality Assurance Framework of the European Statistical System (QAF). A Working Group on Quality and a central quality assurance function have been established to continuously carry through control of products and processes.

Quality assurance

Statistics Denmark follows the principles in the Code of Practice for European Statistics (CoP) and uses the Quality Assurance Framework of the European Statistical System (QAF) for the implementation of the principles. This involves continuous decentralized and central control of products and processes based on documentation following international standards. The central quality assurance function reports to the Working Group on Quality. Reports include suggestions for improvement that are assessed, decided and subsequently implemented.

Quality assessment

A comprehensive quality assessment is based on a combination of assessing turnover coverage, the number of companies and prices in the sample and the quality of the collected prices, including the pricing methods used. Overall the Producer price index for renovation and maintenance is assessed to be of a high quality and representative for the price development of the activities in question performed by Danish craftsmen. The assessment rests upon the data collection that the index is based on. This data contains 3,000 prices divided onto 29 activity codes. Within each trade, the largest businesses, according to turnover, are selected (top down) to achieve the highest turnover coverage possible.

The trades that are covered by the index are quite different, especially with regards to the number of businesses. In trades with very few businesses and monopoly-like conditions it takes relatively few reporting businesses to get a high coverage. In trades with many business, a higher number of reporting businesses are required to achieve the coverage needed. Thus, a benchmark for the quality of the sample across all trades cannot be made. The quality of the statistic is being continually monitored and improvements are made where it is assessed that the quality can be levered. Conducting quality work includes replacing companies, increasing the number of respondents, asking existing respondents to report more prices, or to use better pricing methods to define and calculate prices.

Data revision - policy

Statistics Denmark revises published figures in accordance with the Revision Policy for Statistics Denmark. The common procedures and principles of the Revision Policy are for some statistics supplemented by a specific revision practice.

Data revision practice

No revisions are performed. Only final values are published.