Transcript Presentation - United Nations Statistics Division

Quality Assurance Procedures for
Estimating Purchasing Power Parities
39th Session
Marko RISSANEN, Statistician, The World Bank Group,
Washington, DC, USA; [email protected]
Nada HAMADEH, Senior Statistician, The World Bank
Group, Washington, DC, USA; [email protected]
Introduction: PPPs and ICP
What
are PPPs
Purchasing power parities are conversion rates that convert
to common currency while equalizing the purchasing power
of different currencies
Why use
PPPs
Accurate volume measures of economic activity, as well as
comparisons of standards of living across countries, require
conversion rates that take into account price levels
What
is ICP
The International Comparison Program (ICP) is a worldwide
statistical initiative designed to estimate PPPs; partnership
of +200 countries, regional and global organizations
PPP Estimation Process
Country National implementing agencies (NIAs) collect prices and
related data for items (regional/global) covering a whole
Level
range of final goods and services (GDP)
Regional Regional implementing agencies (RIAs) use national
prices to estimate regional PPPs:
Level
- At basic heading level (CPD: prices + missing prices)
- Above the basic headings (GEKS: PPPs + exp. weights)
Global
Level
Global ICP Unit (GIU) uses regional data to estimate global PPPs:
- Global prices are used to calculate linking factors (CPD)
- Regional PPPs are linked using the linking factors
- Global PPPs are aggregated (GEKS)
- Global PPPs are adjusted for fixity (CAR)
Overview of Quality Assurance
Validation
Stages
• By NIAs
• To ensure
data quality
within the
country
Intra-Country
Validation
Inter-Country
Validation
• By NIAs and RIAs
• To ensure data quality
and plausibility of the
results within the
region
Generation of
validation measures
Iterative
Process
Correction
Review
• By RIAs and GIU
• To ensure data
quality and
plausibility of the
results across the
regions
Global
Validation
Intra-Country Validation
Initial
Validation
Review of merged datasets; item codes; observed
quantities and units of measurement; sub-national price
variations; temporal price variations
Statistical
Tests
Review of average price measures: coefficients of
variation; max/min ratios
Review of individual price observation measures:
standard deviations; t-values
Data
Finalization
Preparation of average prices; number of observations;
coefficients of variation
Inter-Country Validation
Initial
Validation
Review for extreme data errors
Validation
at BH level
Comparison of averages prices and related measures
across the countries (main phase of the validation stage)
Validation
above BHs
Comparison of averages prices and related measures
across the countries above a single basic heading (BH)
Temporal
Validation
Comparison of PPP and price level indices across time
Data
Preparation of final regional results and data for
Finalization submission (after iterative rounds)
Example: Quaranta Table
Milk, fresh, unskimmed, well known brand
CTR
AR
BD
BR
CO
GH
ID
KE
KH
MW
NG
PE
PH
VE
VN
ZA
LCU price
14.08
62.31
2.93
2,726.92
10.18
20,206.00
122.67
7,960.09
666.69
466.70
3.63
79.63
276.88
35,019.00
12.75
#Obs
CV
132
86
726
162
35
294
24
6
30
279
80
179
165
276
88
17
3
20
18
11
24
31
5
27
28
11
6
26
21
17
CV 19.2
XR-Price
XR-Index
GM 1.19
0.98
82
0.80
67
0.75
63
0.81
68
2.58
216
1.49
125
1.21
102
1.98
166
0.91
76
2.35
197
1.04
87
1.67
140
0.69
58
1.57
132
0.79
67
PPP-Price
PPP-Index
GM 1.19
0.89
75
1.09
91
0.98
82
1.06
89
1.31
110
1.23
103
1.31
110
1.60
134
1.21
101
1.47
123
0.95
79
1.34
112
0.99
83
1.69
142
1.11
93
Global Validation
Regional
Quality
Review of regional quality thresholds
Global Price
Quality
Review of representativity of global prices among
regional prices; quality of global prices across the
countries; variability of the inter-regional linking factors
Quality of
Global PPPs
Degree of similarity of aggregated bilateral PPPs
(Paasche-Laspeyres spreads)
Plausibility of Historical results; Penn-effect; Balassa–Samuelson
Global Result effect
Example: Price Level vs GDP p.c.
Thank You
Additional
Resources
Measuring the Real Size of the World Economy: The
Framework, Methodology, and Results of the
International Comparison Program
Purchasing Power Parities and the Real Size of World
Economies: A Comprehensive Report of the 2011
International Comparison Program
Operational Guidelines and Procedures for Measuring
the Real Size of the World Economy: 2011 International
Comparison Program
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Online
http://siteresources.worldbank.org/ICPEXT/Resources/I
CP_2011.html