Eurostat-OECD Methodological Manual on Purchasing Power Parities (2012 Edition)

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The OECD, Eurostat, and 47 participating countries work together in establishing purchasing power parities, or PPPs, in order to compare the price and volume levels of the GDPs. This programme is called the Eurostat-OECD PPP Programme. The manual gives a complete, detailed and up-to-date description of the functioning of the programme. This includes its organisation, the various surveys carried out by participating countries and the ways PPPs are calculated and disseminated. It also provides guidance on the use of PPPs.


Component expenditures of GDP

Eurostat and OECD comparisons of GDP are made from the expenditure side. Each country participating in a comparison is required to provide either Eurostat or the OECD with a detailed breakdown of its expenditure estimate of GDP for the reference year. The detailed expenditures are used as weights in the calculation of PPPs and in the estimation of real expenditures. For this they need to be harmonised across participating countries that are required to report their final expenditures according to a common classification. This chapter explains the definitions and concepts underlying the common classification used for Eurostat and OECD comparisons. It describes the structure and presentation of the classification. The classification itself can be found in Annex III. The chapter also covers the reporting of expenditure data by countries and the subsequent validation of reported data by Eurostat or the OECD. It concludes by identifying those developments that will occur after publication of the manual and which will impact on the classification.


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