The Country-Product-Dummy Method: A Stochastic Approach to the Computation of Purchasing Power Parities in the ICP

A paper for presentation at the SSHRC Conference on Index Numbers and Productivity Measurement to be held during 30 June � 3 July, 2004 in Vancouver. The author wishes to thank Bettina Aten, Erwin Diewert, Alan Heston, Chris O�Donnell and Marcel Timmer for helpful discussions on the subject matter of this paper.

Multilateralisation of manufacturing sector comparisons : issues, methods and empirical results

This paper examines the feasibility of constructing a consistent set of multilateral comparisons of manufacturing sector output and productivity within the framework of the ICOP project. A major objective of the paper is to construct truly multilateral comparisons using the existing data base of the ICOP project. This data base consists of data constructed essentially on the basis of detailed bilateral comparisons. Multilateral unit value ratios are built up from the lowest level possible (the product level). The second objective of the paper is to examine in-depth the problem of aggregation of unit value ratios. Various aggregation methods, both well-known methods and new ones, are applied and sensitivity of the results is examined. New multilateral aggregation methods are developed which take into account differences in number of matches of the underlying binary comparisons, as well as the Laspeyres-Paasche spread which is considered to be a general indicator of reliability. Finally, the paper presents empirical results derived from the application of the above procedures to data for eight countries for the 1987 benchmark year.

Systems of Index Numbers for International Price Comparisons Based on the Stochastic Approach

In this paper, we introduce a new class of index numbers for international price comparisons. We prove the existence and uniqueness of the new price index. We then propose a stochastic approach to the Ikle (1972) and the new system of index numbers. The advantage of the stochastic approach is that we can derive standard errors for the estimates of the purchasing power parities (PPPs). The PPPs and the parameters of the stochastic model are estimated using a weighted maximum likelihood procedure. Finally we estimate PPPs and their standard errors for OECD countries using the proposed methods.

Total Factor Productivity Growth in Agriculture: A Malmquist Index Analysis of 93 Countries,1980-2000

In this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output. We make use of data drawn from the Food and Agriculture Organization of the United Nations and our study covers the period 1980-2000. Due to the non-availability of reliable input price data, the study uses data envelopment analysis (DEA) to derive Malmquist productivity indexes. The study examines trends in agricultural productivity over the period. Issues of catch-up and convergence, or in some cases possible divergence, in productivity in agriculture are examined within a global framework. The paper also derives the shadow prices and value shares that are implicit in the DEA-based Malmquist productivity indices, and examines the plausibility of their levels and trends over the study period.

Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution

Gini coefficient, generalized beta distribution, urban and rural inequality