Quaranta table: Difference between revisions
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** Variation in PPP ratios for an item | ** Variation in PPP ratios for an item | ||
** Variation in price observations | ** Variation in price observations | ||
"However, it must be remembered that the principal reason for calculating PPPs is the fact that when the prices of a given product are converted into a common currency unit using exchange rates, they are not in fact equal in all countries. The general leve l of prices tends to be systematically higher or lower in some countries than in others. Thus, a high or low XR price for an individual item in one country may be largely due to the fact that the general price level for that country is high or low when exc hange rates are used. It may not signal any abnormality in that particular price. For this reason, XR price ratios are less useful than PPP price ratios for validation purposes."<ref name="validation-tables" />{{rp|9}} | |||
==Usage== | ==Usage== | ||
Revision as of 02:37, 10 November 2017
The Quaranta table is a validation table used during PPP calculation. The table groups results by item or basic heading.
History
The table was first proposed by Vincenzo Quaranta for use in the European PPP program in 1990.[1]
Validation type
The Quaranta table computes various statistics of the data and to see if any of these are outside some safe range. Therefore it performs a logical/deductive validation. It does not require collecting new data or keeping a separate dataset for use in validation.
Validation process
- Comparison of average prices
- Exchange rate ratios
- PPP ratios
- Price Level Index
- Price variation
- Variation in PPP ratios for a basic heading
- Variation in a country's PPP ratios for a basic heading
- Variation in PPP ratios for an item
- Variation in price observations
"However, it must be remembered that the principal reason for calculating PPPs is the fact that when the prices of a given product are converted into a common currency unit using exchange rates, they are not in fact equal in all countries. The general leve l of prices tends to be systematically higher or lower in some countries than in others. Thus, a high or low XR price for an individual item in one country may be largely due to the fact that the general price level for that country is high or low when exc hange rates are used. It may not signal any abnormality in that particular price. For this reason, XR price ratios are less useful than PPP price ratios for validation purposes."[1]Template:Rp
Usage
Quaranta tables have been used in OECD-Eurostat regional comparisons.[2]Template:Rp
See also
External links
- Validity (statistics) (Wikipedia)
References
Script error: No such module "Check for unknown parameters".