Affiliation:
1. Research Program in Development Studies, Woodrow Wilson School, 328 Wallace Hall, Princeton University, Princeton, NJ 08544.
2. University of Pennsylvania, 433 12 St SE, Washington, DC 20003.
Abstract
We provide an overview of the theory and practice of constructing PPPs. We focus on four practical areas: how to handle international differences in quality; the treatment of urban and rural areas of large countries; how to estimate prices for government services, health, and education; and the effects of the regional structure of the latest International Comparison Program for 2005. We discuss revisions of the Penn World Table, and their effects on econometric analysis, and include health warnings. Some international comparisons are close to impossible, even in theory, and in others, the practical difficulties make comparison exceedingly hazardous. (JEL C43, E01, E31, O57).
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
168 articles.
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