Prices

An interesting query came up at work today.  It was about the difference between the producer price index, and the wholesale price index.  I gave the answer that producer prices were at the factory gate (or farm gate), while prices in the wholesale market included the costs of transportation to the wholesale market.  This led me to think that perhaps there could be insurance costs for the transport as well.  And then I was reminded of excise taxes, that were levied at the factory gate.  In principle, I think the excise tax should not be included in a producer’s price, because this concept is supposed to measure what the producer actually gets.  But I think in Indian WPI, prices include excise taxes.  I must check up on this.

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