PPPs for Industry Output: A New Dataset for International Comparisons

Abstract

International comparisons of output, prices and productivity have been hampered by the unavailability of comprehensive sets of PPPs at the industry level. Existing expenditure PPPs and production PPPs both have their limitations. This paper proposes to use a mix of both for industry level comparisons. On the basis of a supply-use framework, the paper identifies how expenditure prices and output prices are conceptually related. It developscriteria on the basis of which an optimal mix of expenditure PPPs and production PPPs can be chosen. The paper then shows a PPP dataset for gross output for 45 industries (capturing the total economy) and 25 advanced countries. This dataset is the first comprehensive dataset of PPPs covering this large number of industries and countries. We illustrate its potential for research purposes by analysing patterns of relative prices in manufacturing and services.