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Methodology and Research

ICP 2011

The ICP 2011 built on lessons learned from the 2005 program while improving existing methods and introducing innovations through a research agenda covering various ICP areas.

The list of methodological areas that required specific research included: the treatment of owner-occupied housing, the treatment of financial services, the measurement of government outputs, problems associated with the review of survey frameworks, the treatment of exports and imports, the adjustment of household consumption data for net purchases abroad, the linking and aggregation of global PPPs, the method for construction PPPs, PPP-based poverty analysis, the PPP extrapolation methodology, and sub-national PPPs.

HISTORICAL BACKGROUND

The ICP 2005 framework set out concerted remedial actions for international and regional agencies, along with national data compilers. Targeted research, international conferences and expert group meetings addressed longstanding issues linked to PPP aggregation methods, and also data collection and processing practices.

A research grant, as part of the World Bank Chief Economist Research Initiative, in January 2002 helped finance the preparation of more than 20 research papers and an international conference in December 2002. Additional resources from the ICP global trust fund, World Bank sources, the African Development Bank and the Asian Development Bank contributed to the preparation of additional papers and case studies. The ICP research was undertaken in consultation, and in some cases in collaboration, with the OECD/Eurostat PPP program.

While the general principle underlying the ICP methodology was essentially the same as in the previous rounds, significant changes were introduced in the 2005 Round:

  • A new Structured Product Description (SPD) approach has improved the scope and quality of regional and global lists of specifications.
  • A comprehensive Handbook and a set of operational guidelines serve both as reference material and step-by-step guidance for data collection and compilation.
  • An integrated software system, the Tool Pack, has been developed for standardized data collection, verification and processing, and capacity building.
  • Great strides have been made in construction and equipment surveys, aggregation of PPPs at the basic heading level, linking of regional results to estimate robust global PPPs, and estimation of poverty-specific PPPs.

The following links provide access to the papers and case studies:

Development of regional and global list of specifications
Survey Frames and Surveys: Organization and Implementation
Development of data collection, verification and processing software
Comparison of services - general government, heath, and education
Comparison of machinery and equipment goods
Comparison of construction projects
Compiling weights for basic expenditure headings
Estimation of PPPs at the level of basic expenditure headings
Linking of regional results 
Poverty PPPs

Additional Research was conducted which resulted in the papers below:

Aggregation of PPPs above basic headings
Estimation of PPPs for non-benchmark countries using a regression model
Estimation of PPPs for non-benchmark years to generate time series PPPs
Estimation of PPPs for non-benchmark economies for the 2005 ICP round 




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