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Improvements in ICP Methodologies

Innovations and improvements are being developed to further the attainment of the key objectives of the 2011 ICP.

The main innovations are: (i) the development of a comprehensive outreach strategy; (ii) the preparation and implementation of an ICP quality assurance framework; (iii) the elaboration of a statistical capacity building strategy; (iv) the preparation and publishing of an ICP book titled “Measuring the Size of the World Economy”; (v) the development of a national accounts framework for ICP that will be implemented using specifically defined guidelines of activities; (vi) a system of economic validation of price and expenditure data that will be implemented together with statistical validation methods that proved effective in 2005; (vii) a new method to compute global PPPs; and (viii) continuous improvements in ICP methodologies.

Improvements will mainly relate to survey frameworks and instruments for price surveys on the main household consumption products, education and health services, compensation of government employees, and machinery and equipment. The survey framework for household consumption prices will be reviewed to enhance the quality and consistency of household survey data, better delineate urban and rural areas wherever applicable, improve spatial pricing and geo-referencing sampled outlets. A “core set of data” required for poverty purposes will be identified and included in the relevant price surveys. Moreover, the method to link the regions and the OECD-Eurostat PPPs into global results will change from the ring approach used in 2005, to a core list approach whereby all countries will be requested to include a common set of products in their list of products to be surveyed. The research agenda recommended by the ICP Technical Advisory Group should also result in additional improvements of survey, validation and computation processes.

In addition to the above, the issue of consistency in time and space analysis of PPPs will be furthered in the ICP 2011. Pilot exercises are underway in Asia and Africa using 2005 prices as benchmark and compiling PPPs for 2009 on the basis of a reduced version of the 2005 list of products.

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