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					International Comparison
         Program
    International Comparison
    Program - 2005 Round




    FV comments to ITAG—Feb 2009
               Overview
• Summary of methodology used in ICP
  2005
• Reflections
  – Regions
  – National vs Urban/Rural
  – Ring
Scope and Coverage of Data Collection




                                                               Eurostat


                                                                          America
                                                               OECD -




                                                                                     W. Asia
                                       Africa




                                                                           Latin




                                                                                                 Ring
                                                 Asia


                                                         CIS
              Category



Food and non - alcoholic beverages    356       223     198      422        147     353         281
Alcoholic beverages and tobacco        41        19      20       72          8      21          30
Clothing and footwear                 128        78     104      319        136     162         132
Housing and utilities                  21        17      22       64         18      12          35
Furnishing and household equipment     95        85      91      460         77      83         124
Health                                144       112      75      244         51      69         162
Transportation                         55        65      47      365         33      29          96
Communication                          19        19      16       81          8      12          28
Recreation and Culture                 49        70      79      336         54      59          96
Education                               7         7       7        5         10      11           7
Restaurants*                           51        25      45      117         14      20          60
Misc. .goods and services              34        56      36      136         22      31          44
Total consumption                    1000       776     740    2621         578     862        1095
General Government                     50        50                          50      50          50
Construction                           34        34                          34      34          34
Equipment                             108       108                         108     108         108
           Diversity of regions required different
                          methods


   Africa                         Five regions
                              (plus Eurostat-OECD)
    Asia

     CIS
                                  Have different:
South America
                           • Economies (size, structure)
                               • Statistical capacity
Western Asia


Eurostat-OECD
                                 • Methodologies
Comparison of Methodology
     Reflections--Workload
• There is a limit to what countries can
  do at one time
  – Shop items in 2005—2-4 collections
  – Construction, equipment, gov’t and ring in
    2006
• Can # of products be reduced?
• Can scope of coverage be reduced?
• Assess quality trade off from number of
  collections vs. number of products?
Reflections--Representativity
• Representative product is representative of
  all products in the BH and has a
  representative price???? Was not
  understood
• Instead, can more flexibility be added to
  price collection for coding?
  –   Price determining characteristics
  –   Outlet type
  –   Outlet location
  –   Loosen specs—add coding characteristics?
Reflections—Aggregation to BH
• CPD vs EKS?
• CPD more robust
• CPD provided Dikhanov tables showing
  structure of variability
         Data Validation - Prices
                                                   Back
From Dikhanov Tables
             1   2     3   4   5   6   7   8   9




             1   2     3   4   5   6   7   8   9
      Reflections--Housing
• Learn from how regions were linked—
  CPD with quantity and quality
  indicators for 106 countries
• Start process much earlier with review
  of national accounts
• Eurostat-OECD and CIS provide same
  quantity/quality data for all countries?
• Two stage estimation—Quantity for
  all—rents where available?
 Reflections--Compensation
• Global specs developed—
  Eurostat/OECD use? CIS use?
• Data quality—multiple data collections?
• Productivity—evaluate for all regions--
  review alternatives
  – Subregions of like countries within regions
  – Create subregions of like countries across
    regions
    Reflections--Equipment
• Equipment—was everything priced
  sold?
• Number of items?
• Specifications reflect developing
  country purchases?
• Harmonize with Eurostat-OECD-CIS?
• Give modified X-rates another
  consideration
                 Reflections—Basket of construction components
System           Component                  System              Component
Site work        Aggregate base             Exterior shell      Aluminum frame window
                 Earthwork                                      Sand
                 Exterior sidewalk                              Portland cement
                 Concrete                                       Unskilled labor
                 Aggregate                                      Skilled labor
                 Portland cement            Interior            Masonry interior wall
                 Sand                       partitions          Portland cement
                 Backhoe                                        Sand
                 Unskilled labor                                Plywood
                 Skilled labor                                  Unskilled labor
Substructure     Aggregate base                                 Skilled labor
                 Column footing             Interior/exterior   Exterior wall cement plaster
                 Aggregate                  finishes            Interior ceiling plaster
                 Portland cement                                Interior wall plaster
                 Reinforcing steel                              Exterior paint
                 Sand                                           Interior paint
                 Concrete                                       Portland cement
                 Backhoe                                        Sand
                 Plywood                                        Plywood
Superstructure   Structural column round                        Unskilled labor
                 Structural column square                       Skilled labor
                 Concrete                   Mechanical and      Unskilled labor
                 Aggregate                  plumbing            Skilled labor
                 Portland cement            Electrical          Electrical service point
                 Reinforcing steel                              Unskilled labor
                 Sand                                           Skilled labor
                 Structural steel
                 Plywood
                 Unskilled labor
                 Skilled labor
   Reflections-Construction
• Basket of Construction Components
  – Composite vs basic inputs—data quality
  – Weights needed—should more than one
    set of weights be provided; for example,
    for more than one kind of residentual
    building?
  – Can more use be made of basic
    components?
  – Harmonize with CIS/BOQ?
 Reflections—Urban vs Rural
• What is rural?
  – Share of rural population in France
    • 27 % using French definition
    • 30% using Spanish definition
    • 51 % using Italian definition
  – Only 18% of Dutch population live in urban
    areas
• What is urban/rural boundary?
  – Some rural in commuting range of large
    urban area
  Reflections—urban vs rural
• Definitions vary significantly
• Price variability depends on geographic
  dispersion rather than urban/rural
• Issue should be whether need a national
  price or capital or primary city prices
• ICP designed to provide PPPs to compare
  the GDP.
• Need separate survey measuring what the
  poor purchase?
  Reflections--Expenditures
• Start tomorrow to review national
  accounts
• !55 Basic headings needed?
• What about NPISH—own consumption?
          Reflections--Ring
• Can a core ring list be subset of regional
  lists?
  – Can more price determining characteristics be
    obtained during data collection of regional data?
  – Can these be used to identify core products to
    become the ring list?
  – Can/should the Eurostat-OECD also use the
    SPD/PS?
• What is the optimum number of ring
  countries?
Reflections—regional and linking
• Should countries be grouped by
  economic similarities vs geographic
  location for global volumes?
• Should be global volumes be first
  estimated, then distributed to
  geographic regions and/or economic
  regions?
     Linking Factors – Numerical
              Example
1.
                         4.




                                                   5.        6.
2.


3.



                   Base Country for Region I
                       For the ICP: US

                                                 Base Region
                                               For the ICP: OECD
           Regional Price Level Indices
                   and linking
 Table 6. Regional Price Level Indices (US = 100) for each level of aggregation
Regional Price Level Indices (US = 1) for each level of aggregation
                                                                Asia/               OECD-       South    West
          PRICE LEVEL INDEX, US=1
                                                     Africa    Pacific   CIS        Eurostat   America   Asia
 GDP                                                      46        41         43         99        52          51
 Actual Individual Consumption                            46        39         36         98        52       49
  Food and non-alcoholic beverages                        83        60         55        111        69       62
  Alcoholic beverages, tobacco and narcotics              64        65         37         93        37       49
  Clothing and footwear                                   65        56         91        111        82       60
  Housing, water, electricity, gas and other fuels        30        39         17         92        48       60
  Furnishings, household equipment and maintenance        57        62         67        107        72       54
  Health                                                  22         9         15         76        27       19
  Transport                                               89        70         72        123        89       55
  Communication                                           92        35         61         98        58       93
  Recreation and culture                                  77        48         51        107        79       76
  Education                                               15        11          8         67        28       21
  Restaurants and hotels                                  78        73         66        124        71      118
  Miscellaneous goods and services                        48        46         45        102        54       44
              Conclusions
 Most intensive effort ever to measure PPPs
  across countries:
     New methodology;
    Improved data collection and processing;
    Intensive data validation;
    Inclusion of China and India plus better
     coverage of Africa has given widest
     coverage ever.
    However, more to improve
 Need to include more countries
Success from Partnerships

     Thanks to the Technical
   Advisory Group and looking
    forward to future efforts

				
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posted:4/14/2013
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