Click here for search results

Resources

Methodology and Research

ICP 2011

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

The ICP is investigating a methodology that will cover private and public education and health services. For this, new partnerships are being sought with targeted departments in the World Bank and external organisations that can provide technical advice.

The ICP 2005 methodology related to machinery and equipment will be implemented with significant improvements: a core list of items will be developed; the 2005 specifications will be revised to provide an updated list for 2011; the Global Office will ensure bridging between the OECD-EUROSTAT and the ICP lists; a component costs method will be used as a price validation tool for machinery and equipment. As for construction and civil engineering, a review of existing methods is being carried out with a view to improving data collection in the countries and the linking with OECD-EUROSTAT and CIS. 

The list of methodological areas that require specific research studies includes: 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 representativity problem, the aggregation of global PPPs, the price averaging process, PPP-based poverty analysis, and the back-casting methodology in terms of handling PPP revisions.

 

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.

Members of the Technical Advisory Group were instrumental in the success of this initiative, both in providing guidance and undertaking influential studies. 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 

 




Permanent URL for this page: http://go.worldbank.org/JGQRFL4410