There is an abundance of information
contained in the 1985 regional comparison results. These comparisons
produced a wealth of statistics revealing price and expenditure
conditions in a total of 64 countries, that is, almost one third
of the countries of the globe. Since the inception of the ICP the
number of participating countries has increased significantly (see
table E), though the coverage is still far from being universal.
The reasons why certain countries did
not join the programme, or others that had participated earlier
dropped out, are manifold. For a large number of countries participation
is simply not possible without outside support, mainly technical
assistance that requires appropriate funding. Such funding has been
available for certain groups of countries, while it could not be
secured for others in phase V. While insufficient financial support
might adversely influence the decision of some countries regarding
participation in the ICP, this explanation may not apply in the
case of all nations outside the programme. Some countries may have
different priorities in their national statistical services that,
from their point of view, would outweigh the importance of obtaining
internationally comparable national accounts and price data, or
the benefits from participation. While reasons can be very complex,
the fact is that in phase V no countries from Latin America or Western
Asia were covered, in spite of the intentions and efforts of the
coordinating organizations.
In the present report only some features
of the regional comparisons with reference year 1985 are highlighted.
For more detailed results and information on how the regional comparisons
were conducted, the reports pertinent to each comparison should
be consulted. The relevant publications are listed in the References.
In addition to the published data,
more detailed results may be available, upon request, from the organizations
coordinating each regional comparison. Regions, however, may have
different policies regarding whether basic national data on prices
and expenditures can or cannot be released for research purposes,
depending upon the approval or restrictions imposed by the participating
countries concerned. Inquiries about the availability of such detailed
information could be directed to the respective agencies acting
as regional centres.
- AFRICAN COMPARISON
At the outset of the ICP work in phase 1, more than two decades
earlier, one African country-Kenya-was included in the International
Comparison Programme. For 1985, the regional comparison involved
22 African countries. Participating countries in the 1985 African
comparison were Benin, Botswana, Cameroon, Congo, Cote d'lvoire,
Egypt, Ethiopia, Kenya, Madagascar, Malawi, Mali, Mauritius, Morocco,
Nigeria, Rwanda, Senegal, Sierra Leone, Swaziland, United Republic
of Tanzania, Tunisia, Zambia and Zimbabwe. Seven African countries,
namely, Benin, Congo, Egypt, Mauritius, Rwanda, Sierra Leone and
Swaziland, were newcomers in the programme for 1985.
The key role in the work was undertaken by EURO- which coordinated
and managed the African regional comparison, including data collection
and processing work. EUROSTAT also provided substantial funding
for the African exercise. Conducting the African comparison took
four years of work and involved efforts concentrated in an extensive
regional programme, headed by EUROSTAT working in close cooperation
with the national statistical offices of the participating countries.
The classification scheme applied in the African comparison for
1985 comprised 170 basic headings where consideration was given
to the minimum requirement of data availability at the detailed
level for the world comparison. 'The number of basic headings
for Private Consumption (including government expenditure on health
and education) was 126; for Public Consumption 6; for Gross Fixed
Capital Formation 36; and for Changes in Stocks and Balance of
Exports and Imports I each. The number of products selected for
pricing in each basic heading varied considerably. The total number
of representative items exceeded 1,000 goods and services; for
Private Consumption alone 973 items were selected, 174 specified
items were used to price Equipment Goods (Transport, Machinery
and Other Equipment), and for the comparison of construction prices
10 structures were chosen. Price surveys were conducted between
December 1985 and May 1987; in most countries they were completed
in the first half of 1986. In order to estimate prices in 1985,
temporal adjustments were made to some of the prices reported.
While the actual conduct of the surveys was the responsibility
of the national statistical offices, survey documents and technical
advice were provided by EUROSTAT.
The computations made by EUROSTAT included appropriate edit checks
and additional computing for the countries which did not provide
national average prices, but only submitted price observations.
Transitive basic parities were derived by using the Elteto-Koves-Szulc
(EKS) method; for the aggregation of basic PPPs and calculating
real values for aggregated categories of the GDP, the Geary-Khamis
(G-K) method was applied. In the presentation of results of the
comparison for the 22 African countries in 1985, the real values
for each country are expressed in Purchasing Power Standard (PPS).
Instead of giving preference to the currency of a single country,
a numeraire was chosen which combined the currencies of all countries
in the region.
The results show a nearly 16-fold difference between the first-
and the twenty-second-ranked countries (Mauritius and Ethiopia,
respectively). Per capita real GDP in Mauritius is over three
times the African average, while Ethiopia accounts for one fifth
of the African average level. Countries with per capita GDP around
the African average were Zimbabwe, Nigeria and Senegal in 1985.
The report on the African ICP results for 1985 emphasized four
major potential applications of the information developed in the
comparisons.
First, potential application of ICP results is considered in
costing investment projects. As is stated in the report, specific
surveys undertaken within the ICP on prices, quantities, quality,
the cost of installation etc. should make it much easier for the
authorities to assess the investment costs of projects they are
planning.
Second, the use of the information is placed in the context of
competitiveness; detailed price data obtained from the comparison
can be used to compare international export prices with local
prices for specific capital goods, so that their competitiveness
can be assessed.
Third, national authorities are expected to analyse ICP data
to promote national price and income policies. The report on the
African comparison states that it is obviously important for such
policy measures that national price structures and differences
in price levels between different regions should be known, even
if only approximately, and improved knowledge of regional price
variations obtainable from the ICP could help the authorities
to improve the supply situation (by improving transport, storage
facilities, packaging and marketing etc).
Fourth, it is thought that ICP information could help in understanding
the structural imbalances of a country by considering the corresponding
structures in another country. Such a comparison may be particularly
rewarding when it concentrates on countries at different stages
of economic development.
In addition to the specific advantages of the ICP information
for analytical and research purposes in Africa, the organizational
and methodological improvements engendered in the national statistical
services of the participating countries were among the significant
gains of the work. In a number of African countries, before they
got involved in the regional comparison, price surveys had been
irregularly taken and were restricted to large towns (or to the
capital city only), and the sample of household consumer products
was often limited and not strictly defined. Similar improvement
in reporting national accounts data was experienced. For example,
it was found that nearly all the 15 countries that participated
in both the 1980 and 1985 phases revised their national accounts
estimates.
The results of the African regional comparison are fully incorporated
in the 1985 global comparison.
TABLE E.COUNTRY PARTICIPATION IN THE PHASES OF THE ICP
Country/Area
|
Phases
|
I
|
II
|
III
|
IV
|
V
|
Benchmark Year
|
1970 a
|
1973 b
|
1975
|
1980
|
1985
|
Africa
|
|
|
|
|
|
|
Benin
|
|
|
|
|
x
|
|
Botswana
|
|
|
|
x
|
x
|
|
Cameroon
|
|
|
|
x
|
x
|
|
Congo
|
|
|
|
|
x
|
|
Cote d'lvoire
|
|
|
|
x
|
x
|
|
Egypt
|
|
|
|
|
x
|
|
Ethiopia
|
|
|
|
x
|
x
|
|
Kenya
|
x
|
x
|
x
|
x
|
x
|
|
Madagascar
|
|
|
|
x
|
x
|
|
Malawi
|
|
|
x
|
x
|
x
|
|
Mali
|
|
|
|
x
|
x
|
|
Mauritius
|
|
|
|
|
x
|
|
Morocco
|
|
|
|
x
|
x
|
|
Nigeria
|
|
|
|
x
|
x
|
|
Rwanda
|
|
|
|
|
x
|
|
Senegal
|
|
|
|
x
|
x
|
|
Sierra Leone
|
|
|
|
|
x
|
|
Swaziland
|
|
|
|
|
x
|
|
Tunisia
|
|
|
|
x
|
x
|
|
United Republic of Tanzania
|
|
|
|
x
|
x
|
|
Zambia
|
|
|
x
|
x
|
x
|
|
Zimbabwe
|
|
|
|
x
|
x
|
Asia and Oceania c
|
|
|
|
|
|
|
Bangladesh
|
|
|
|
|
x
|
|
Hong Kong
|
|
|
|
x
|
x
|
|
India
|
x
|
x
|
x
|
x
|
x
|
|
Indonesia
|
|
|
|
x
|
|
|
Iran, Islamic Republic of
|
|
x
|
x
|
|
x
|
|
Israel
|
|
|
|
x
|
|
|
Japan
|
x
|
x
|
x
|
x
|
x
|
|
Malaysia
|
|
x
|
x
|
|
|
|
Nepal
|
|
|
|
|
x
|
|
Pakistan
|
|
|
x
|
x
|
x
|
|
Philippines
|
|
x
|
x
|
x
|
x
|
|
Republic of Korea
|
|
x
|
x
|
x
|
x
|
|
Sri Lanka
|
|
|
x
|
x
|
x
|
|
Syrian Arab Republic
|
|
|
x
|
|
|
|
Thailand
|
|
|
x
|
|
x
|
|
Australia
|
|
|
|
|
x
|
|
New Zealand
|
|
|
|
|
x
|
North America c
|
|
|
|
|
|
|
Canada
|
|
|
|
x
|
x
|
|
United States of America
|
x
|
x
|
x
|
x
|
x
|
|
Mexico
|
|
|
x
|
|
|
Central and South America
c
|
|
|
|
|
|
|
Argentina
|
|
|
|
x
|
|
|
Bahamas
|
|
|
|
|
x
|
|
Barbados
|
|
|
|
|
x
|
|
Bolivia
|
|
|
|
x
|
|
|
Brazil.
|
|
|
x
|
x
|
|
|
Chile
|
|
|
|
x
|
|
|
Colombia
|
x
|
x
|
x
|
x
|
|
|
Costa Rica
|
|
|
|
x
|
|
|
Dominican Republic
|
|
|
|
x
|
|
|
Ecuador
|
|
|
|
x
|
|
|
El Salvador
|
|
|
|
x
|
|
|
Grenada
|
|
|
|
|
x
|
|
Guatemala Honduras
|
|
|
|
x
|
|
|
Jamaica
|
|
|
x
|
|
x
|
|
Panama
|
|
|
|
x
|
|
|
Paraguay
|
|
|
|
x
|
|
|
Peru
|
|
|
|
x
|
|
|
Saint Lucia
|
|
|
|
|
x
|
|
Suriname
|
|
|
|
|
x
|
|
Trinidad and Tobago
|
|
|
|
|
x
|
|
Uruguay
|
|
|
x
|
x
|
|
|
Venezuela
|
|
|
|
x
|
|
Europe c
|
|
|
|
|
|
|
Austria
|
|
|
x
|
x
|
x
|
|
Belgium
|
|
x
|
x
|
x
|
x
|
|
Denmark
|
|
|
x
|
x
|
x
|
|
Finland
|
|
|
|
x
|
x
|
|
France
|
x
|
x
|
x
|
x
|
x
|
|
Germany, Federal Republic of
|
x
|
x
|
x
|
x
|
x
|
|
Greece
|
|
|
|
x
|
x
|
|
Hungary
|
x
|
x
|
x
|
x
|
x
|
|
Ireland
|
|
|
x
|
x
|
x
|
|
Italy
|
x
|
x
|
x
|
x
|
x
|
|
Luxembourg
|
|
|
x
|
x
|
x
|
|
Netherlands
|
|
x
|
x
|
x
|
x
|
|
Norway
|
|
|
|
x
|
x
|
|
Poland
|
|
|
x
|
x
|
x
|
|
Portugal
|
|
|
|
x
|
x
|
|
Romania
|
|
|
x
|
|
|
|
Spain
|
|
|
x
|
x
|
x
|
|
Sweden
|
|
|
|
|
x
|
|
Turkey
|
|
|
|
|
x
|
|
United Kingdom of Great Britain
and Northern Ireland
|
x
|
x
|
x
|
x
|
x
|
|
Yugoslavia
|
|
|
x
|
x
|
x
|
a In phase 1, there were
6 countries which also provided benchmark data for 1967.
b In
phase 11, 6 additional countries provided benchmark data for 1970,
which were combined with revised data for the original 10 benchmark
countries; in addition, all estimates were also made for 1973
based on some original and some updated price data.
c Countries in this table are listed by geographical
areas, since regionali- of the ICP became effective in phase IV
and onward. However, one should bear in mind that the composition
of ICP regions does not necessarily correspond to the geographically
contiguous areas as shown above.
- CARIBBEAN COMPARISON
The Caribbean comparison
for 1985 covered the following seven countries: Bahamas, Barbados,
Grenada, Jamaica, Saint Lucia, Suriname, and Trinidad and Tobago.
Except for Jamaica, this was the very first time that these Caribbean
countries ever participated in the ICP.
The Caribbean work was
coordinated by the Statistical Office of the European Communities
(EUROSTAT), assisted by its consulting agency, the European Center
for World-wide Cost of Living Comparisons (EuroCost), in data
collection and preparation of the study on the regional results.
The two organizations worked in close cooperation with the national
statistical authorities of the countries involved, in consultation
with the Caribbean Community secretariat. Substantial financial
support for this regional programme was provided by EUROSTAT.
Work on the Caribbean comparison
was started later than phase V activities in other regions. The
overall methodology, data needs and organization of the project
were reviewed at a workshop held at Kingston, Jamaica, in 1987.
In the Caribbean comparison with reference year 1985, the overall
classification scheme for which expenditure data were required
comprised 170 basic headings. The number of basic headings under
each of the major GDP aggregates corresponded to those in the
classification scheme of the 1985 African comparison. The list
of products for household consumption and machinery and equipment
used in the Caribbean price comparison was based on the one drawn
up for the phase V comparison in Africa. After some modifications
aiming at reflecting items typical in the Caribbean and omitting
African commodities uncharacteristic in the Caribbean countries,
but with most items originating from the African list, a total
of 876 products for consumption and 170 for equipment goods were
priced. Basic data were collected by the national statistical
offices assisted by EUROSTAT and EuroCost experts. The price surveys
were carried out between May and October 1989 in the countries
concerned, typically during a one-month period. In order to estimate
the price levels for 1985, the ICP reference year of phase V,
national price index information was used to take price changes
between 1985 and 1989 into account. The study on the regional
results, "Comparison of price levels and economic aggregates me
results of seven Caribbean countries" (EUROSTAT, Luxembourg, 1991),
contains a complete listing of the deflators used for adjusting
surveyed prices.
Data processing was undertaken
by EUROSTAT. The calculation of basic parities was based on the
EKS method; for the aggregation the G-K method was chosen. To
present comparison results, a numeraire was chosen that combined
the currencies of all seven Caribbean countries compared. The
GDP of each country in absolute and per capita terms is expressed
in national currency, in United States dollars (converted by official
exchange rates) and in Purchasing Power Standard (PPS).
The regional study produced
by EuroCost officials contains abundant information on the methods
applied and presents the Caribbean comparison results at the level
of all 170 basic headings as well as the summary aggregates up
to GDP. The results, however, have yet to be reviewed and approved
by the participating countries, at a regional meeting scheduled
for early 1994. Therefore, under these circumstances and for reasons
explained in section IVB, this region could'not be integrated
into the 1985 global comparison.
- ESCAP COMPARISON
In the ESCAP regional comparison
with reference year 1985, the following countries participated
at full scale: Bangladesh, Hong Kong, India, Iran (Islamic Republic
of), Japan, Pakistan, the Philippines, the Republic of Korea,
Sri Lanka and Thailand. The above 10 countries took part in the
entire programme aiming at estimating real GDP levels and corresponding
PPPs. In addition, the participation of Nepal was limited to the
comparison of consumption only. Japan joined the ESCAP comparison
simultaneously with its participation in the 1985 OECD comparison;
that made possible a convenient linking of the results obtained
in the two studies. Both Japan and India have been long-time participants
of the International Comparison Programme since its phase I onwards;
the other ESCAP countries, except Bangladesh and Nepal, also had
previous experience with ICP work.
Organizational and data
processing activities of the comparison were shared by the Statistical
Division of the United Nations Secretariat (UNSTAT) and the United
Nations Economic and Social Commission for Asia and the Pacific
(ESCAP). Technical assistance was provided also by experts of
the World Bank, of the Statistical Office of the European Communities
(EUROSTAT) and of the Statistics Bureau of Japan. Regional ICP
work in Asia and the Pacific for 1985 was sponsored by the Government
of Japan, the Asian Development Bank, the United Nations Development
Programme and the World Bank.
Data inputs for the comparison
were the result of the combined efforts of the participating countries;
in their efforts countries received technical assistance from
numerous sources, as mentioned above. Actual comparison work started
with a regional seminar held in Bangkok in September 1986; another
three regional workshops and meetings held between 1984 and 1990
contributed to the clarification of tasks and to the checking
and evaluation of the results. Most of the data surveys took place
during the first half of 1987. Data processing was undertaken
by the Statistical Office of the United Nations Secretariat (UNSTAT).
In the ESCAP comparison
163 basic headings were distinguished. In all, for household consumption,
1,533 specifications were priced. It should be noted that GDP
data submitted for the comparison, as in the case of many countries
in other regions, are not exactly the same as the data reported
for the same year in the United Nations National Accounts Statistics:
Main Aggregates and Detailed Tables, 1985. The discrepancies
are due to the countries' efforts to follow ICP principles to
enhance comparability; however, the coordinating agencies are
not aware of all of such corrections made.
On the basis of the prices
submitted for the selected specifications, the PPPs were determined
by using the CPD method. In order to give emphasis to the requirement
of characteristicity, countries were asked to indicate the degree
of characteristicity of each item priced so that items termed
uncharacteristic would not be taken into account in the final
calculation of PPPs. In this manner, care was taken to collect
prices of items which were both representative and comparable;
however, the requirement could not be equally satisfied in respect
of each pair of countries. As in the practice of other regions,
some countries usually tend to price items included in their national
consumer price indices, while others favour conducting special
surveys for the sake of comparability that, in some cases, may
result in pricing higher-quality, more expensive commodities.
Experience available from the 1985 ESCAP comparison indicates
that, for example, Bangladesh tilted mainly to the former solution
while India often followed the latter, and this might have resulted
in their unusual relative volume indices.
The aggregation formula
applied in the ESCAP comparison was the G-K. In this regional
comparison the original national currency data converted by PPPs
to values at international average prices of the countries involved
are expressed in "Asian dollars", a nominal currency which plays
the role of the numeraire only. Its purchasing power for the gross
domestic product total (taking all participating countries together)
equals the purchasing power of the United States dollar in 198
thus, the total gross domestic product of the whole regio whether
expressed in Asian dollars or United States dollars, is the same.
However, in each sub-aggregate group of the GDP the purchasing
power of the Asian dollar is determined on the basis of ESCAP
average prices. In the ESCAP study, the results of the quantity
comparisons are expressed relative to the average ESCAP level.
The ranking of the countries
according to the level of real GDP per capita indicates that in
1985 its level in Japan and Hong Kong was 4-5 times as high as
the Asian average, while Bangladesh and India reached about one
third of the average of me 10 ESCAP countries analysed. The selected
data below present the relative position of Nepal within ESCAP,
since its results are not included in the tables with global results.
- EEC COMPARISON
A comparison including
the 12 member countries of the European Economic Community (EEC)
was conducted by EUROSTAT with reference year 1985. The EEC comparison
included Belgium, Denmark, France, Germany (Federal Republic of),
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain
and the United Kingdom, all of which participated in previous
rounds of the ICP as well.
TABLE
F. 1985 PER CAPITA GDP COMPARISON IN ASIA
(Average of the 10 countries = 100)
GDP
rank
|
Country
name
|
GDP
per capita
|
Household
consumption
|
Government
consumption
|
Capital
formation a
|
1
|
Japan
|
525.3
|
486.2
|
218.4
|
698.9
|
2
|
Hong
Kong
|
454.2
|
483.1
|
202.1
|
451.8
|
3
|
Iran
(Islamic Rep. of)
|
204.1
|
213.4
|
212.9
|
179.5
|
4
|
Korea,
Rep. of
|
176.8
|
164.3
|
153.2
|
212.7
|
5
|
Thailand
|
116.2
|
118.8
|
272.9
|
68.7
|
6
|
Sri
Lanka
|
81.4
|
74.8
|
158.4
|
76.8
|
7
|
Philippines
|
78.5
|
93.8
|
139.4
|
25.8
|
8
|
Pakistan
|
58.8
|
63.4
|
185.4
|
14.4
|
9
|
Bangladesh
|
36.5
|
43.7
|
82.4
|
7.3
|
10
|
India
|
33.1
|
36.6
|
45.7
|
21.6
|
|
Nepal
b
|
|
33.1
|
55.9
|
|
a Including
net exports.
b Nepal provided data only for the comparison of consumption.
In the EEC comparison a
classification system consisting of 258 basic headings was used.
The ample specification list, as well as other technical documents
elaborated by EUROSTAT, served as an example for developing similar
documents for the purposes of other regional comparisons, including
the 1985 OECD comparison. The total number of products
included in the specification lists for various aggregates was
close to 3,000 items. For price collection, the surveys were carried
out between autumn 1984 and spring 1986. For the
first time in the ICP, instead of concentrating on the reference
year, price surveys were split over a longer period to distribute
the workload more equally. This experiment of EUROSTAT was further
explored later on and became known as the "rolling benchmark year
approach".
Price collection in the
EEC countries was the responsibility of the national statistical
institutions. Data collection in the EEC countries was largely
financed by EUROSTAT. In the calculation of parities at the basic
heading level the EKS method was used, which enabled EUROSTAT
to give more importance in the computations to items that were
more representative in a given country. For multilateral aggregation
in 1985, EUROSTAT used the G-K method. Results are expressed
at average prices of the 12 countries using the Purchasing Power
Standard (PPS) as the reference monetary unit. In order to avoid
taking the currency of one country as reference, in the Community
framework the ECU was chosen. Thus, the GDP of the Community expressed
in PPS as the numeraire is equal to the total GDP of the Community
in ECU. As mentioned elsewhere in this report, the choice of the
numeraire or of the reference unit is a matter of convention and
does not affect the results of the comparison.
The comparison results
for the EEC regarding the price level index show that in 1985
three groups of countries could be distinguished in relation
to the Community average. Denmark, Germany and France had a price
level well above the Community average; in five countries, the
Netherlands, Belgium, Luxembourg, the United Kingdom and Ireland,
it was around the average; and in Italy, Greece, Spain and Portugal
it remained well below it.
The results illustrate
the divergence of exchange rates and PPPs and its consequences
on the ratios in real terms among countries. The report by EUROSTAT
mentions two extreme cases as examples of this phenomenon. Denmark's
share of total Community GDP equals 2.31 per cent if converted
by exchange rates of ECU but falls to 1.85 per cent if calculated
in real terms. On the other hand, Portugal's share amounts to
0.82 per cent on the basis of values in ECU but increases to 1.59
per cent expressed in real terms based on PPP conversion. In 1985
the per capita volume index for real GDP was highest in Luxembourg
(127.8 per cent) compared to the EEC average, two and a half times
as high as in Greece and Portugal at the other end of the ranking.
Unlike other regions in
the ICP framework, the EEC comparison results computed by EUROSTAT
are used in the Community not only in economic analysis and fore-
but also as one of the criteria for the distribution of Community
revenue and funds.
The results of the EEC
comparison were incorporated into the OECD comparison, the European
Comparison Programme and the global ICP for 1985, whereas the
requirements of the "fixity principle" in respect of the 12 Community
countries have been taken into consideration to preserve the uniformity
of the EEC data.
- OECD COMPARISON
Twenty-two OECD countries
were covered in the OECD 1985 comparison. In addition to the 12
EEC mem- the countries covered were Austria, Australia, Canada,
Finland, Japan, New Zealand, Norway, Sweden, Turkey and the United
States of America; only two OECD member countries, Iceland and
Switzerland, were not included. All countries had previous experience
with the ICP except for Australia, New Zealand, Sweden and Turkey,
which participated in the programme for the first time in 1985.
As before, the PPPs and
associated estimates of real expenditure on GDP based on price
and expenditure data for 1985 were calculated in collaboration
with EUROSTAT. In respect to the comparison of the 12 Community
countries and Austria, the coordination responsibilities rested
with EUROSTAT; the OECD organized the comparison for the remaining
9 countries. The actual calculations for the entire OECD group
were carried out by EUROSTAT. The results for the 12 Community
countries, calculated at average EEC prices, remained unchanged
in the OECD framework; only real values for Be EEC as a whole
and the results for the other 10 OECD countries were shown at
average OECD prices-that is, the average prices of the 22 countries.
As a consequence of the "fixity principle", the linked data are
not additively consistent, so linked components do not sum to
linked totals.
The classification scheme
of the 1985 OECD comparison consisted of 202 basic headings. The
difference between the EEC and OECD classifications was confined
to the number of expenditure categories for Private Final Consumption,
consisting of 160 basic headings in the OECD comparison to which
the 216 EEC headings aggregated exactly. In the OECD comparison
the product specification lists developed by EUROSTAT were used.
These lists were updated after consultations with the countries
concerned and enlarged by the OECD to include commodities representative
of the 10 additional OECD countries. The specification lists for
1985 covered some 2,500 consumer goods and services, 30 occupations
in govern education and health services, 250 types of machinery
and equipment, and 18 construction projects. As in the procedure
followed in the EEC comparison, items were priced in five surveys
conducted between autumn 1984 and spring 1986. Rents, insurance
and medical services not covered in these surveys were subjects
of special inquiries in mid- 1986. Prices provided for machinery
and equipment, as well as construction, were mid-year prices for
1985, and in many countries price collection was done by private
consultants. Price data collection for consumption was the responsibility
of national statistical services. In some cases the price surveys
were carried out in the capital cities and, where needed, the
individual price quotations adjusted by EUROSTAT to national averages
and for 1985.
Expenditure data were collected
according to the detailed breakdown for 1985 or the latest year
available, which might be 1984 or even 1983. This expenditure
breakdown was then applied to national data on GDP and its main
components available for 1985.
In the calculations for
1985, the EKS method was used to obtain the basic heading parities
and the G-K method was used to aggregate the PPPs and real values.
In this procedure Austria was treated as the EEC countries and
therefore is PPPs and real values were initially calculated at
average EEC prices. However, in the final tables Aus- data are
shown at average OECD prices. The OECD comparison used the United
States dollar as the common unit of currency.
In the report on the OECD
comparison, the presentation of the detailed results used two
expenditure classifications, those of the ICP and the SNA, having
56 and 57 expenditure categories, respectively. Data according
to the ICP classification offer a better comparative measure of
the actual volume of goods and services consumed by households
of different countries. On the other hand, re suits following
the SNA classification provide better comparative estimates of
the total volume of services financed by government. The OECD
report also contains a brief explanation of the methods applied.
Regarding the results of
the 22 OECD countries in 1985, the indices of real value of the
GDP per capita, with the United States level as 100, show that
the two countries closest to the United States level were Canada
(92.5) and Norway (84.4), while Luxembourg, the country with the
highest comparable figure in the EEC comparison, ranked fourth
among the OECD member States. Turkey, the twenty-second in the
OECD ranking, reached about one fifth of the United States level.
Comparison results of the
22 OECD countries are fully covered in the globally processed
data for 1985.
- EUROPEAN COMPARISON
PROGRAMME
The European Comparison
Programme (ECP) for 1985, which covered 20 European countries,
was implemented by means of cooperation among three interna- organizations,
the European Communities, the OECD and the Economic Commission
for Europe (ECE) of the United Nations, as well as the Austrian
Central Statistical Office and the national statistical offices
of the participating countries. The major novelty of this comparison
was that it extended the comparison results available from the
common EEC-OECD study to three Eastern European countries, Hungary,
Poland and Yugoslavia, which, together with Austria, formed the
so-called Group 11 region. The ECP was built from the following
three principal components:
- The EEC comparison,
covering its 12 member countries, namely: Belgium, Denmark,
France, Germany (Federal Republic of), Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain and the United Kingdom
- A portion of the OECD
comparison, covering the 12 members of the European Community,
plus 5 European OECD members-Austria, as well as Finland, Norway,
Sweden and Turkey;
- The so-called Group
II comparison, in which Hungary, Poland and Yugoslavia carried
out a set of binary comparisons with Austria in an effort coordinated
by the Austrian Central Statistical Office and the United Nations
Economic Commission for Europe (ECE).
Initially, the three components
were conducted separately, but the methodology has been coordinated
to facilitate the linking of the comparisons in the second stage
of the work. Since producing results for the EEC and the European
OECD countries has been the responsibility of the relevant agencies,
the organizers of the ECP focused mainly on the Group 11 comparison
and on the linking of the above three components that was achieved
by the dual participation of Austria in two comparisons simultaneously.
The three Eastern European
countries had accumulated considerable experience from their participation
in previous phases of the ICP. In addition, the direct bilateral
comparison and the frequent consultations with Austria offered
an excellent possibility for checking and improving the comparability
of data that positively contributed to the high quality of this
regional comparison. Final processing of the ECP was conducted
by EUROSTAT, and the report of the European comparison was produced
at the ECE of the United Nations. The regional report covers results
for the 20 European countries at the level of 53 aggregated categories.
The detailed classification
used in the Group 11 comparison included a breakdown of the GDP
with 288 basic headings. This classification had to be harmonized
with the ones used in the EEC and OECD comparisons to permit linking.
For each binary comparison between Austria and the Eastern European
countries, more than 1,000 representative items were selected
and priced. A peculiarity of the Group II comparison is that it
uses quality adjust- to the prices collected to express quality
differ- in the commodities, enhancing both the representativeness
and comparability of the specifications used. Since the Group
II comparison was carried out on a bilateral basis, the PPPs for
Hungary, Poland and Yugoslavia at the basic heading level were
obtained from the direct bilateral comparisons with Austria as
the 'base country, and in the aggregation those PPPs were weighted
by the expenditures of the two respective countries (Austria and
each of its three partners) by using the Fisher index formula.
In contrast, in the EEC and OECD exercises a multilateral approach
was applied using the G-K method for aggregation. In the linking
process, the fixity arrangement was required for the 12 Community
countries and Austria to keep their results unchanged in the broader
ECP context, and the method of generating overall ECP results
was chain-linking carried out at each level of the aggregation.
As a consequence, the ECP results have limited additivity; that
means the relative shares, of real values cannot be compared throughout
all 20 countries. As a matter of fact, regarding the actual numerical
results, the lack of additivity had only a minor effect on the
1985 ECP data.
The 1985 European comparison
revealed that 63 per cent of the estimated total real GDP of the
20 European countries was produced in just four countries, Germany
(Federal Republic of), Italy, the United Kingdom and France, where
about half of the population of these countries live on 28 per
cent of the total territory involved. in respect of differences
in the level of per capita real GDP, the group of 20 European
countries looks relatively ho- as compared to other regions of
the ICP. Yet the fourfold difference between the highest level-two
countries, Luxembourg and Norway, sharing the top of the ranking-and
that of the twentieth-ranked country (Turkey) is quite significant.
For the countries included, the per capita GDP indices were expressed
in comparison with the Austrian level. It should be mentioned
here that for presenting results of the ECP the "international
Schilling" (AS-1), based on the currency of Austria, was chosen
as numeraire. This means that the AS-1 value of the GDP of Austria
is the same as at national prices, at the total GDP level only.
The per capita GDP levels of seven countries, Austria, France,
Finland, the Netherlands, the United Kingdom, Italy and Belgium,
were very close to each other and to the average of the 20 European
countries in 1985. In the context of the global comparisons this
means about 65-70 per cent of the United States level or about
$US 11,000 at international prices.
The three Eastern European
countries, Hungary, Yugoslavia and Poland, in that order, ranked
17, 18 and 19 among the 20 European countries, with per capita
real GDP levels reaching 47.2, 44.2 and 37.1 per cent of the Austrian
level, respectively.
An interesting feature
of the European Comparison Programme for 1985 was that the so-called
similarity indices among the price structures and the quantity
structures of the participating countries were calculated. The
greatest similarities in respect to price structure were found
between France and each of the following countries: Belgium, Austria,
the Netherlands and Luxembourg; the price structure similarities
in 1985 were the lowest between Portugal and the Netherlands and
between Poland and each of the following countries: Belgium, Austria
and France.
In the European comparison
a strong correlation was observed between the exchange rate/PPP
ratio and the relative level of per capita GDP. In the most developed
countries the ratio of exchange rate to PPP was close to 1, while
exchange rates compared to PPPs at the GDP level were 2-2.6 times
as high in Hungary, Portugal, Turkey and Yugoslavia.
The results of the ECP
have been integrated unchanged into the global comparison of 56
countries for 1985.