Comparisons of Prices and Real Products in Latin America (eBook)

Front Cover 1
Comparisons of Prices and Real Products in Latin America 4
Copyright Page 5
Table of Contents 12
INTRODUCTION TO THE SERIES 6
LIST OF CONTRIBUTORS 8
EDITORS' INTRODUCTION 10
OVERVIEW 16
Part I: Latin American Comparisons 24
Chapter 1. COMPARISONS OF PURCHASING POWER AND REAL INCOME IN LATIN AMERICA: A REVIEW OF METHODS 26
1. Introduction 26
2. General Methodological Aspects 29
3. Specific Methodological Aspects 31
4. Study procedures 35
ANNEX 1: Price Collection and Verification Schedule 53
ANNEX 2: Tentative List of Institutions Participating in the Parities and Products Project 54
References 56
APPENDIX I 60
APPENDIX II 63
APPENDIX III: Volume I ECIEL PROGRAM PARITIES AND REAL PRODUCTS STUDY THIRD PRICE SURVEY, JULY 1979. GENERAL INSTRUCTIONS 66
Appendix III: Volume II ECIEL Program: Parities and Real Products Study Third Price Survey: July 1979 General Instruction: Capital Formation and Private Consumption 73
Appendix III: Volume III ECIEL Program: Parities and Real Products Stydy July 1979 General Instructions: Public Consumption 77
Chapter 2. COMPARISONS OF PURCHASING POWER AND REAL INCOME IN LATIN AMERICA: EMPIRICAL RESULTS 80
1. Introduction 80
2. Results for 1973 80
3. The Comparisons of Real Products and the Estimation of the Purchasing Power Parities, 1973 81
4. Price Levels in Latin America 85
5. Latin American Comparisons , 1979 93
Chapter 3. REAL PRODUCT AND PRICE COMPARISONS IN CENTRAL AMERICAN COUNTRIES: 1987 102
1. Introduction 102
2. Methods of Aggregation 103
3. The Main Results 105
Chapter 4. INDIRECT TAXATION, TARIFF PROTECTION AND PRICE RELATIVES IN THE CENTRAL AMERICAN COMMON MARKET 114
1. Introduction 114
2. Indirect taxes and tariffs in Central America 115
3. Price levels in Central America 117
4. Regression analysis 119
5. Conclusions 121
References 122
Part II: Theory 124
Chapter 5. A GENERALIZED KONUS SYSTEM OF INDEX NUMBERS FOR MULTILATERAL COMPARISONS 126
1. Introduction 126
2. Notation, Definitions and Concepts 127
3. The Konus Index for Binary Comparisons 129
4. A Generalized Konus Index System for Multilateral Comparisons 130
5. Generalized Konus System based on Geary Reference Price Vector 131
6. Some special cases of the Generalized Konus System 136
7. Conclusions 137
References 139
Chapter 6. A SYSTEM OF LOG-CHANGE INDEX NUMBERS FOR MULTILATERAL COMPARISONS 142
1. Introduction 142
2. Definitions and Notations 143
3. Viability of the new system 145
4. Properties of the System 148
5. A Numerical Illustration 151
References 153
Chapter 7. A THEORETICAL AND EMPIRICAL ANALYSIS OF INDEX NUMBER FORMULAE FOR MULTINATIONAL PURCHASING POWER AND PRODUCT COMPARISONS 156
1. Introduction 156
2. Desirable Characteristics of Index Number Formulae 157
3. FORMULAE FOR INTERNATIONAL COMPARISONS 158
4. Analysis of Index Formulae 162
5. Sensitivity of indices to errors in data 167
References 169
STATISTICAL APPENDIX 170
Part III: Methodological Issues 180
Chapter 8. EXTRAPOLATIONS OF PURCHASING POWER PARITIES 182
1. Introduction 182
2. Background 184
3. Procedures 186
4. Results 196
5. Conclusions 214
APPENDIX: IMPORTANCE OF CERTAIN LIMITATIONS 218
ANNEX 1: UNITARY DEVIATION INDICES OF THE OFFICIAL EXCHANGE RATE WITH RESPECT TO THE PURCHASING POWER PARITIES FOR 1960,1962, 1968 and 1973 223
ANNEX 2: UNITARY DEVIATION INDICES OF THE OFFICIAL EXCHANGE RATE WITH RESPECT TO THE PURCHASING POWER PARITIES, 1968 224
ANNEX 3: UNITARY DEVIATION INDICES OF THE OFFICIAL EXCHANGE RATE WITH RESPECT TO THE PURCHASING POWER PARITIES, 1973 225
ANNEX 4: UNITARY DEVIATION INDICES OF THE OFFICIAL EXCHANGE RATE WITH RESPECT TO THE PURCHASING POWER PARITIES, 1973 226
ANNEX 5: PROCEDURE AND INDICATORS USED FOR CALCULATING THE FINAL CONSUMPTION EXPENDITURES OF HOUSEHOLDS, AT CONSTANT PRICES 227
ANNEX 6: PROCEDURES AND INDICATORS USED FOR CALCULATING THE CONSUMPTION EXPENDITURES OF THE GENERAL GOVERNMENT, AT CONSTANT PRICES 228
ANNEX 7: PROCEDURES AND INDICATORS USED FOR CALCULATING THE GROSS DOMESTIC FIXED CAPITAL FORMATION, AT CONSTANT PRICES 229
ANNEX 8: PRICE INDICES FOR THE PERIOD 1968-1973 231
ANNEX 9: ARGENTINA: PRICE VARIATIONS OF COMPARABLE GOODS 232
ANNEX 10: ECUADOR: PRICE VARIATIONS OF COMPARABLE GOODS 235
ANNEX 11: HOMOGENEOUS GOODS: EXTRAPOLATIONS OF THE PURCHASING POWER PARITIES OF THE GROSS DOMESTIC PRODUCT 238
ANNEX 12: HOMOGENEOUS GOODS: EXTRAPOLATIONS OF THE PURCHASING POWER PARITIES OF PRIVATE CONSUMPTION 239
ANNEX 13: EXTRAPOLATIONS OF PARITIES WITH A BASKET OF COMPARABLE GOODS 240
ANNEX 14: MEANS AND COEFFICIENTS OF VARIATION OF EIGHT INDICES OF PRIVATE CONSUMPTION CONSTRUCTED WITH ECIEL DATA FOR THE PERIOD 1968-1973 241
References 242
Chapter 9. THE USE OF REGRESSION METHODS IN INTERNATIONAL COMPARISONS 244
1. Introduction 244
2. The selection of durable goods 246
3. The regression method 247
4. The Hedonic technique in a nutshell 248
5. Regressions, "pooled regressions" and the "flexible pooling" approach 249
6. Results of the price comparisons using Regression methods 254
7. Comparisons of regression results with direct price observations 256
References 260
Chapter 10. INTERNATIONAL COMPARISONS ON THE BASIS OF DIFFERENT TYPES OF PRICES 262
1. Introduction 262
2. Annual Prices Versus Prices For A Given Month 264
3. National Prices Versus In Capital Cites 267
4. Annual-National Prices Versus Capital City Prices for A Given Month 272
ANNEX 273
Part IV: Sectoral Comparisons 276
Chapter 11. The International Comparisons of Output and Productivity (ICOP) Project: A Progress Report 278
ICOP and ICOP-related Publications 285
Chapter 12. COMPARING REAL OUTPUT, PURCHASING POWER AND LABOUR PRODUCTIVITY: A CASE STUDY FOR ARGENTINA AND THE UNITED STATES, 1973-1985 290
1. Introduction 290
2. Reconciliation of census data and the national accounts 292
3. Binary Comparisons of Output, Purchasing Power and Labour Productivity in Argentina and the USA, 1973, 1975 and 1985 296
4. Productivity and Competitiveness of the Manufacturing Sector in Argentina 316
5. Summary and Conclusions 319
References 322
Chapter 13. Agricultural Output and Productivity of Labour and Land in Latin America 326
1. Introduction 326
2. The Data and Concepts Employed 327
3. Analysis of results 330
4. Conclusions and policy implications 344
References 347
Chapter 14. A METHODOLOGY FOR COLLECTING CONSTRUCTION PRICES 350
1. Introduction 350
2. Engineering Projects: Specification and Cost Estimates 351
3. Materials and basic items of the building 357
4. Specification models 358
References 362
Chapter 15. METHODOLOGY FOR COMPARING RENTS 364
1. Introduction 364
2. Method of Hedonic Prices and Comparison of rents 366
3. Results of Applications in Latin America 370
4. Bases for the Weights 377
References 379
INDEX 380