Comparison of PPP formulas: Difference between revisions
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A lower bound on the number of price indices: "But Walsh (1901) and Fisher (1922) presented hundreds of functional forms for bilateral price indexes".<ref name="diewert-index-numbers" /> My current understanding is that only a handful are commonly used in practice, perhaps because the others fail to satisfy nice properties. | A lower bound on the number of price indices: "But Walsh (1901) and Fisher (1922) presented hundreds of functional forms for bilateral price indexes".<ref name="diewert-index-numbers" /> My current understanding is that only a handful are commonly used in practice, perhaps because the others fail to satisfy nice properties. | ||
The multilateral indices can be divided into those that use binary comparisons (i.e. make use of some binary index) and ones that don't. Examples of the former are EKS and Van Yzeren. Examples of the latter are Walsh indices (apparently there are multiple).<ref>{{cite web |url=http://documents.worldbank.org/curated/en/974171468766774952/pdf/multi-page.pdf |title=World Product and Income: International Comparisons of Real Gross Product (United Nations International Comparison Project Phase III) |year=1982 |first1=Irving B. |last1=Kravis |first2=Alan |last2=Heston |first3=Robert |last3=Summers |publisher=Johns Hopkins University Press |accessdate=November 5, 2017}}</ref>{{rp|76, 77}} | The multilateral indices can be divided into those that use binary comparisons (i.e. make use of some binary index) and ones that don't. Examples of the former are EKS and Van Yzeren. Examples of the latter are Walsh indices (apparently there are multiple).<ref>{{cite web |url=http://documents.worldbank.org/curated/en/974171468766774952/pdf/multi-page.pdf |title=World Product and Income: International Comparisons of Real Gross Product (United Nations International Comparison Project Phase III) |year=1982 |first1=Irving B. |last1=Kravis |first2=Alan |last2=Heston |first3=Robert |last3=Summers |publisher=Johns Hopkins University Press |accessdate=November 5, 2017}}</ref>{{rp|76, 77}} This is probably why Walsh is listed as both a binary and a multilateral index: there is some binary formulation, and you can probably generalize it for multilateral comparison, but that multilateral index does not use the binary comparisons from the binary version. (My guess at what's going on.) | ||
==See also== | ==See also== | ||
Revision as of 21:32, 5 November 2017
This page is a comparison of PPP formulas. A PPP formula is used to calculate price matrices.[1]
Comparison table
| Formula name | Type | First publication year | Used in | Superlative? | Additive?[3] | Notes |
|---|---|---|---|---|---|---|
| Laspeyres | Bilateral | |||||
| Paasche | Bilateral | |||||
| GEKS-Fisher | ||||||
| Geary–Khamis | Multilateral | 1958, 1972[4]Template:Rp | ICP 1975 (Kravis, Kenessey, Heston, and Summers) | |||
| Superlative method | I think this is a class of methods defined by Walter Erwin Diewert; they are all the ones that satisfy a list of properties, see [1] | |||||
| Gerardi[3] | EUROSTAT[3] | |||||
| Binary-Fisher[3] | ||||||
| EKS[3] | Multilateral | |||||
| Walsh[3] | ||||||
| Van Yzeren[3] | ||||||
| Exchange rate[3] | ||||||
| Young[4] | ||||||
| Sidgwick–Bowley[4] | Bilateral | Arithmetic mean of Laspeyres and Paasche | ||||
| Fisher ideal[4] (same as "Fisher"?) | Bilateral | NIPA 1999 in part of the contribution to percent change calculation[5] | ||||
| Marshall–Edgeworth[4]Template:Rp | ||||||
| Carli[4]Template:Rp | Bilateral | 1764 | ||||
| Jevons[4]Template:Rp | Bilateral | 1865 | ||||
| Törnqvist[4]Template:Rp | Bilateral | 1936 | ||||
| Konüs–Byushgens[4]Template:Rp | 1926 | |||||
| Star method[4]Template:Rp | Multilateral | |||||
| Democratic weights method[4]Template:Rp | Multilateral | |||||
| Plutocratic weights method[4]Template:Rp | Multilateral | |||||
| GEKS[4]Template:Rp | Multilateral | |||||
| Own share method[4]Template:Rp | Multilateral | |||||
| Average basket method[4]Template:Rp | Multilateral | |||||
| Country Product Dummy[4]Template:Rp | Multilateral | 1973 |
Notes/scratch work
"Four multilateral methods are considered in detail: (1) Walsh, (2) EKS, (3) Van Yzeren, and (4) Geary-Khamis. Each method goes beyond the binary procedures of Chapter 4 by drawing upon price and quantity data of all countries simultaneously in aggregating up from the category level. They all are base country invariant, and have the transitivity property, and can be adapted to a form that gives additive consistency. The EKS method meets the factor-reversal test. The Geary-Khamis method also satisfies the test at the GDP level. Only in a purely definitional sense (that is, by deriving either the PPPs or the quantity index indirectly) can the Walsh and Van Yzeren methods and the Gery-Khamis subaggretates be said also to meet the test."[6]
What methods do the following use?
- OECD
- Eurostat
- World Bank
- IDB
chained/chain-linked vs fixed-base versions for each of the above? [2]Template:Rp [3]Template:Rp
I think there's also bilateral vs multilateral versions of the above?
What parameters do each p (price) or q (quantity) variables take? I have seen time period (usually t or n), commodity/basic heading (c or i), country (j).
A lower bound on the number of price indices: "But Walsh (1901) and Fisher (1922) presented hundreds of functional forms for bilateral price indexes".[4] My current understanding is that only a handful are commonly used in practice, perhaps because the others fail to satisfy nice properties.
The multilateral indices can be divided into those that use binary comparisons (i.e. make use of some binary index) and ones that don't. Examples of the former are EKS and Van Yzeren. Examples of the latter are Walsh indices (apparently there are multiple).[7]Template:Rp This is probably why Walsh is listed as both a binary and a multilateral index: there is some binary formulation, and you can probably generalize it for multilateral comparison, but that multilateral index does not use the binary comparisons from the binary version. (My guess at what's going on.)
See also
External links
- Price index (Wikipedia)
- List of price index formulas (Wikipedia)
References
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