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

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

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.

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Data requirements

Eurostat and the OECD make international volume comparisons of GDP from the expenditure side. With the exception of education and a part of housing, the volumes are estimated indirectly with purchasing power parities (PPPs). PPPs are used because they are measures of relative prices. Prices are easier to observe directly than are volumes and measures of relative prices usually have a smaller variation than measures of relative volumes. Eurostat and OECD comparisons start as price collecting exercises, though other data, such as data on GDP expenditures, have also to be collected before they can be concluded. This chapter identifies the price and other data needed by Eurostat and the OECD to make their comparisons. It starts by defining the three principle concepts: consistency, comparability and representativity. It explains why volume comparisons are given priority over price comparisons and why the three concepts are not fully compatible in practice. It finishes by identifying the actual data that participating countries are required to supply.

English

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