Methods of Aggregation above the Basic Heading Level: Linking the Regions

Walter Diewert

Economics working papers from Vancouver School of Economics

Abstract: The paper explains part of the methodology that was used in the 2005 International Comparison Program (ICP) that compared the relative price levels and GDP levels across 146 countries and 5 regions. Each of the regions constructed its own set of Purchasing Power Parities (PPPs) and relative country expenditure volumes. The paper studies various methods for constructing a global set of relative country volumes and PPPs while respecting the regional parities—the fixity constraint. Two methods emerge as having good properties: a method due to Heston and Dikhanov and an alternative method due to Eurostat, the OECD and Robert Hill. Some small numerical examples illustrate the differences between the various methods.

Keywords: Index numbers; multilateral comparison methods; Purchasing Power Parities; fixity constraint; GEKS; Geary-Khamis; Heston-Dikhanov; Eurostat-OECD-Hill (search for similar items in EconPapers)
JEL-codes: C43 C81 E31 O57 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-09-23, Revised 2011-09-23
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:erwin_diewert-2011-25

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