Ring Comparison Before the program was regionalized between 1980 and 1985, ICP surveys were conducted using a common list of items in all regions, and global PPPs were calculated by pooling price data from all the participating countries. Since the 1980s however, countries participating in the ICP are grouped by region and global comparisons are carried out in two stages. First, regional surveys are conducted on the basis of region-specific baskets of goods and services and regional PPPs are computed from the regional average prices. Regional PPPs are expressed in regional currencies, such as Kenyan shilling for Africa and Hong Kong dollar for Asia. The second stage involves linking regional results to estimate a globally consistent set of PPPs expressed in a common international currency, often the US dollar. Linking of Regions in Past Rounds The linking of regions for the global comparisons in the last ICP round (1993-1996) was done on the basis of several binary comparisons. For example, Japan, a participant in both the Asian and the OECD regional comparisons, was used as a bridge to link PPP results from those two regions. The US served as a bridge to link Africa, Western Asia and the Caribbean regions with the rest of the world. Mexico bridged Latin America with OECD. Current Approach Independent evaluations of the previous round found the Bridge Method of linking regions unsatisfactory. Subsequently, a multilateral approach called the ‘Ring’ was endorsed by the ICP Technical Advisory Group and approved by the Executive Board to improve global results in the 2003-2006 round of the program. The primary objective of the Ring is to provide a multilateral set of regional PPPs that will link regional results. In the Ring approach, a subset of representative countries from each region prices a common list of core global products in addition to their regional surveys. Ring Countries From a global perspective, the Ring Countries serve as a small sample of countries stratified by regions. It is important, therefore, for these countries to be both representative of their region and, at the same time, have available a wide range of goods and services found in countries outside of their region. Nineteen countries serve as Ring Countries in the 2003-2006 round. The criteria for selecting the Ring Countries in this round included: Availability of a wide range of goods and services found in Ring Countries in other regions; Participation in the full GDP comparison; Availability of sound price data and expenditure weights; Capacity to derive annual and national average prices; and Willingness to act as Ring Country.
View the List of Ring Countries in the 2003-2006 round.
Ring Product List Ring Countries provide a comparison and a link with other regions. Individual regional product lists for the Regional Comparison are developed independently through regional meetings of experts familiar with their respective regions without much concern about the products available in other regions. But the products priced by the Ring Countries include both products that are representative of the local economy and products that are not representative. In other words, the ICP Ring Product List, consisting of about 1,000 items, reflects the world, not a particular region. The goods and services included in the Ring Product List must meet two conflicting criteria: comparability and representativity. In order to avoid comparing products of different quality, size and delivery conditions, the products included in the list should be as comparable as possible, if not identical. Representativity means the product should be typical of the consumption patterns of the country under investigation. Great pains have been taken to specify terminology and definitions that describe the same product across the globe. Learn about the process used to build the Ring Product List. Ring Survey Unlike the Regional Comparison, price collection for the Ring Comparison is limited to capital or major cities. Prices collected in the Ring surveys represent the urban, suburban and rural dimensions of those cities. The guidelines for building the Ring survey framework are similar to those recommended for the Regional Comparison (ICP 2003-2006 Operational Manual). Click to read the Ring Comparison Survey Guidelines.
Ring Product Catalog A Ring Product Catalog has been prepared by the ICP Global Office to help price collectors in all regions identify products easily and match like-with-like. The product catalog containing descriptions and images of the products and services to be priced for the Ring Comparison has been made available to price collectors in country offices via Regional ICP Offices. |
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