Download Regional Comparison

Regional Comparison
Region 2
E
2
Region 1
1
BH p/PPPs
RING
A
D
C
B
BH p/PPPs
1
Ring Comparison
Region 2
E
GDP PPP
1
RING
2
GDP PPP
Region 1
A
B
D
C
2
Region 1
A
B
D
C
Regional Comparison
1. Input: item prices (p) for all countries in
region
2. Output: basic heading PPP for each
country
–
–
Relative to one base country or
Relative to average of all countries
3. Divide ring country item prices by the
basic heading PPP
–
Region 1 ring country prices = (p/PPP)
3
RING
2
1
Ring comparison
1. Input: Region 1 ring country prices (p/PPP),
and same for all other ring countries.
2. Output: GPD PPP for each region
- Relative to one base region or
- Relative to average of all regions
3. Multiply country PPPs by regional PPPs
- PPPs (country) x PPP (region) = PPP global
Either at Basic Heading level or GDP level for the
country PPPs
4
Example: Basic Heading = Shoes
(1)
Input Item Prices
Basic Heading: Shoes
(1)
Prices in National Currencies
Item:
Casual
Dress
Sports
Kids
Region 1
country A
4
12
15
2
country B
9
30
30
3
country C
20
70
65
5
country D
16
60
50
7
Region 2
country E
2
4
0.6
Sandals
8
20
0.3
5
Find prices relative to a base country and then
the country PPPs
(unweighted geometric mean in this example)
(2)
Find prices relative to a base country and then find the PPP (Geomean) for each country
(2)
Item:
Region 1
country A
country B
country C
country D
Region 2
country E
Prices Relative to Country D
Casual
Dress
Sports
Kids
0.25
0.56
1.25
1.00
-
0.20
0.50
1.17
1.00
0.30
0.60
1.30
1.00
0.29
0.43
0.71
1.00
2
4
0.6
Sandals
-
Country PPP
Shoes
GeoMean
0.256
0.519
1.079
1.000
0.3
1.095
6
Same for Fruit
(2nd Basic Heading)
Country PPP
Shoes
GeoMean
Country PPP
Fruit
GeoMean
Aggregate country PPPs within
Regions can be calculated (even
before Ring comparison):
0.256
0.519
1.079
1.000
1.237
1.750
4.518
1.000
1.095
1.377
PPP (shoes + fruit)
Region 1 unwtd geomean
country A
0.563
country B
0.953
country C
2.208
country D
1.000
Region 2
country E
1.228
7
Divide BH prices by BH PPPs = (p / PPP) keeping only
SPDs that are in RING comparison
(eg drop Casual shoes, keep Sandals)
(3)
Divide original prices in national currencies (1) by the PPP in (2)
Input to Ring
(3)
Prices / Country PPP
Item:
Casual
Dress
Sports
Kids
Sandals
Region 1
country A
46.90
58.63
7.82
31.27
country B
57.85
57.85
5.79
38.57
Region 2
country E
1.83
3.65
0.55
0.27
8
Repeat procedure done previously,but now find prices relative
to base region and regional PPPs
(4)
Find prices relative to a base region and then find the PPP (Geomean) for each region
Ring Comparison
(4)
Item:
Region 1
country A
country B
Region 2
country E
Prices Relative to Region 2
Dress
Sports
Kids
25.69
31.69
16.06
15.84
14.27
10.56
Sandals
Regional PPP
Shoes
Geomean
29.01
114.17
140.83
1.00
1.00
1.00
1.00
1.00
9
Fruit
(2nd Basic Heading)
Regional PPP
Shoes
Geomean
29.01
1.00
Regional PPP
Fruit
Geomean
6.86
1.00
Unweighted Aggregate
geomean is calculated.
Equals the regional PPP or
factor.
PPP (shoes + fruit)
Region 1
14.11
Region 2
1
10
To Find the Global PPPs
The aggregate (food+fruit) PPP in this example, is a regional
factor.
• 1) Use this factor to multiply country-specific prices and
find the aggregate PPP for each country.
OR
• 2) Find the aggregate PPP for each country first, then
multiply by the factor.
Both will yield the same relative global PPPs. (In other
words, within-region relationships are preserved.)
11
1) Multiply country PPPs times the regional PPP factor from Ring
(5)
Shoes:
Region 1
country A
country B
country C
country D
Region 2
country E
1.095
(5)
Fruit
Region 1
country A
country B
country C
country D
Region 2
country E
Country Regional Adjusted
PPP
PPP
PPP
(a)
(b)
(a x b)
0.256
14.11
3.61
0.519
14.11
7.32
1.079
14.11 15.22
1.000
14.11 14.11
1.00
1.095
Country RegionalAdjusted
PPP
PPP
PPP
(a)
(b)
(a x b)
1.237
14.11 17.46
1.750
14.11 24.69
4.518
14.11 63.75
1.000
14.11 14.11
1.377
1.00
Find the Aggregate PPP =
Geometric Mean
Shoes+Fruit
Region 1
country A
country B
country C
country D
Region 2
country E
Adj PPP
Aggregate
7.94
13.44
31.15
14.11
1.23
1.377
12
OR
2) multiply aggregate country PPPs (slide 7) times
the factor
Shoes+Fruit Country PPP Regional PPP Adj PPP
Aggregate
Aggregate
Region 1
(a)
(b)
(a x b)
country A
0.563
14.11
7.94
country B
0.953
14.11
13.44
country C
2.208
14.11
31.15
country D
1.000
14.11
14.11
Region 2
country E
1.228
1.00
1.23
13