The 6 th Regional Coordinators Meeting April 23 - 25, 2012 Paris - - PowerPoint PPT Presentation

The 6th Regional Coordinators Meeting

April 23 - 25, 2012

Paris

Opening Remarks Welcome by OECD

2

Meeting Sessions

I.

Meeting Objectives and Global Status Report

II.

Regional Status Reports

• III. Metadata and Quality Questionnaires
• IV. Outstanding Items for Special Surveys

V.

Regional Price Data Review

• VI. Global Validation of Price Data, Expenditures, and Importance
• VII. Upcoming Activities and Next Steps

VIII.Recap of Meeting Decisions

3

• I. Meeting Objectives

and Global Status Report

 Overall Objective  Specific Objectives  Governance decisions from EB meetings  Report to the Executive Board  Status of Main Survey (HHC Data) Submission  Status of National Account Data Submission  Global Validation  Potential Risks  Global Office Activities – Q1, 2012  Upcoming Governance Meeting & Reporting

4

Overall Objective

Reference

• bjective

Short-term

• bjective

Complete the current ICP round timely and successfully, at both regional and global level Meet the Executive Board demands related to the soundness of the proposed computation and linking methods, as well as the reliability and quality of input data and ensuing results

5

Specific Objectives

• A. Ensure that all required data and metadata inputs for global linking are being

generated by the regions and the Global Office, in a timely fashion, in accordance with the prescribed quality requirements:  ICP Coverage: country coverage; regional participation; survey coverage.  Prices: completeness; frequency; time and space consistency; comparability; level of disaggregation; etc.  National Accounts: SNA compliance; exhaustiveness; consistency; metadata reporting; etc  Importance indicators: relevance; consistency; reliability; completeness.

• C. Reaffirm our collective adherence to the agreed data and metadata submission

schedule as well as subsequent activities.

• B. Confirm if the linking method can be implemented as recommended in terms of

all the countries pricing Global Core items for all possible basic headings.

6

Specific Objectives

• D. For dual participation, ensure the consistency of methods used for:

 HHC Average Price Data Compiling  HHC Data Validation  Special Survey Average Price Data Compiling  Special Survey Data Validation  Consistency of National Accounts Aggregates and Expenditures used in the two regional programs

7

Governance decisions from EB meetings

TAG and GO to carefully examine issues related to the concept of importance and the extra-pricing of GCL items by a particular country. TAG to carry out a sequence of tests on the translation of importance into quantitative weights. GO to update the Board on any potential risk situations, and stabilize the number of participating economies.

Status and Risk Assessment

RCs to improve punctuality in data submission so that the 2011 round can proceed according to the planned timeline, without sacrificing data quality.

Technical Aspects Outreach Activities and Data Access

GO to prepare a 1-2 page foreword providing a layman definition of PPP and a brief review of the major uses of ICP statistics. GO and TAG to test thoroughly the computation processes . Countries to explain their GDP splitting procedures and provide the sources of the data along with any underlying assumptions applied, extrapolation and calculation methods. Board to explore outreach activities related to PPP results usage in its next meeting in order to prepare a comprehensive communication strategy. OECD and CIS-STAT to communicate with their countries on the potential access to regional non- Core average price data. Board tentatively approved revised 2011 Data Access Policy, except on the access to regional non-Core average prices, which will be further discussed.

8

TAG and GO to carefully examine issues related to the concept of importance and the extra-pricing of GCL items by a particular country. TAG to carry out a sequence of tests on the translation of importance into quantitative weights. GO to update the Board on any potential risk situations, and stabilize the number of participating economies.

Status and Risk Assessment

RCs to improve punctuality in data submission so that the 2011 round can proceed according to the planned timeline, without sacrificing data quality.

Technical Aspects

GO and TAG to test thoroughly the computation processes. Countries to explain their GDP splitting procedures and provide the sources of the data along with any underlying assumptions applied, extrapolation and calculation methods.

Report to the Executive Board on:

The feasibility of the linking approach  Availability of required data and metadata  Timeliness of submission  Testing  Analysis of plausibility of results The quantification

• f importance

indicators The impact of countries in a region pricing more or less Global core items than most

• f the other countries in that region

 Reliability and completeness of importance indicators  Testing  Recommendations of formula and resulting weights to be used Risk assessment

Feasibility Quality Timeliness Access Linking

√ √

Regional results

√ √ √

Global results

√ √

9

Status of Main Survey (HHC data) Submission

Africa Asia - Pacific CIS LAC WA

46 22 N/A 17 8

ICP

94

CAR PAC Sin.

… … 1

Q1

47 22 10 18 8 106 … … 1

Data Submitted

43 23 N/A 17 10 94 … … 1

Q2

48 23 10 18 10 110 … … 1

Survey Conducted Data Submitted

22 23 N/A 16 9 71 … … 1

Q3

48 23 10 18 11 112 … … 2

Survey Conducted Data Submitted

9 N/A N/A N/A 2 11 … … N/A

Q4

48 23 10 N/A 11 94 … … 2

Survey Conducted Data Submitted

OECD- ESTAT

N/A 47 N/A 47 N/A 47 N/A 47

(Dual Part.)

• 2
• 3
• 2
• 3

N/A

• 1

N/A

• 1

Grand Total

92 150 92 154 71 158 11 140

Survey Conducted Participation

23 50 10 18 12 154 21 18 2 47

• 4

197 10

Status of National Accounts Data Submission

Asia Africa CIS LAC WA ICP Region Total Caribbean Pacific Isl. Singleton

MORES format … … 8 12 9 30 … … 1 Other format 12 48 … … … 60 … … …

11 OECD-Eurostat

... 46

Grand Total

30 106

Global Validation

Review of data and metadata received by the Global Office and the VEG in terms

• f:

 Overall quality of price data (by region)  Comparability of data at regional level  Comparability of data at global level  Extent which Global Core prices represent/ reflect regional price levels  Density/sparsity of price data and its effect on computing linking factors  Quality of resulting linking factors  Time consistency with 2005 data

12

Potential Risks

Timeliness of data and metadata from regions No Submission of particular type of data and metadata by a region  Low coverage of non-reference PPP basic headings  Low number of GCL items per basic heading  No GCL items under a basic heading  Single GCP price quotations Coverage Any schedule slippage will have adverse effect on the publication of global and regional PPPs as for Global core items, Global validation depends on regional validation and vice versa. Poor National Accounts metadata reporting

13

Global Office Activities - Q1, 2012

Regional Workshops Mission to Countries Regional Meetings Bilateral Meetings

 Asia-Pacific Region Data Review Workshop organized by ADB (Siem Reap, Cambodia, March 19-30)  5th Western Asia ICP Regional Workshop organized by UN-ESCWA (Dead Sea, Jordan, March 12-15)  EGM on Price Statistics and National Accounts organized by UN- ECLAC for CARICOM, CARTAC and ECCB (St. Kitts, March 26-30)  5th mission of the bilateral comparison between Armenia and Georgia for ICP 2011 (Tbilisi, Georgia, February 20-23)  Western Asia Regional Executive Board Meeting (New York, February 27)  ICP side meeting to review the status of ICP 2011 Round in the Caribbean (New York, February 29)  GO-AfDB (Tunis, Tunisia, March 5-9)  GO-ESCWA (Dead Sea, Jordan, March 16-17)

Governance Meeting

 ICP Executive Board Meeting (New York, February 27)

14

Upcoming Governance Meetings & Reporting

Reports Meetings  TAG Meeting (September 17-18, 2012)  RC Meeting (September 19-21, 2012)  VEG Meeting (September 21, 2012)  ICP Executive Board Meeting (November 2012)  Interim Progress Report to the EB (July 2012)  Report to the 44th session of the UNSC (November 2012)

15

• II. Regional Status Reports

 Status of data collection, submission, and validation for the main survey  Status of data collection submission, and validation for the special surveys  Status of submission of NA data and metadata  Comments and feedback from countries on operational aspects  Upcoming regional events

16

• III. Metadata and

Quality Questionnaires

 ICP Survey Framework Questionnaire  NA Supplemental Quality Assurance Questionnaire  ICP Quality Assurance Checklists

17

ICP Survey Framework Questionnaire

Objectives Demand- driven  Demand from Executive Board for more metadata on geographical coverage  Demand from TAG for systematic recording of country coverage, especially urban/rural  Demand from users of PPP data for better metadata to accompany data releases  Collect information on the Main Price Survey framework including population by region, outlets selected, product items priced, and data collection periods.  Examine exhaustiveness and reliability of collected price data.  Use information in reviewing the quality of the survey as well as for data validation and computation purposes. Structure  Country name and comments 

• A. Population



• B. Outlets selected



• C. Items priced



• D. Collection periods

 Example  Annex 1  Annex 2  Annex 3

18

NA Supplemental Quality Assurance Questionnaire

Uses Background  With more detailed technical questions, this questionnaire is meant to help national accountants identify specific SNA compliance issues.  It may or may not be relevant to other regions, depending on the status of implementation of SNA in the regions in question. Structure  Instructions  Questionnaire (33 questions)  Proposed and used by Asia-Pacific.  This questionnaire is designed to supplement, not replace, the National Accounts Quality Assurance Questionnaire, which was already circulated to the Regional Coordinators.

19

ICP Quality Assurance Checklists

A framework for assessing the quality of the ICP.  This framework will constitute a structured tool to

evaluate the quality of:

ICP processes in countries, regional

• ffices, and Global

Office ICP data, including input data, intermediary data and output data

ICP Quality Assurance Framework Objectives ICP-QAF checklists

A set of questionnaires to help collect the information

required to evaluate the ICP based on the ICP-QAF framework.

 Three sets of questionnaires:  National implementing agency Regional coordinating agency  ICP Global Office

20

ICP Quality Assurance Checklists

Structure



Prerequisites of quality: review of the legal and institutional environment



Integrity



Methodological soundness



Accuracy and reliability



Serviceability



Accessibility Five dimensions

• f quality

Format

21



Simplified automated format



Instructions page



Available in 4 languages: English, French, Spanish, and Arabic

• IV. Outstanding Items

For Special Surveys

 Construction  Machinery and Equipment  Water

22

Construction Survey

OVERVIEW

• f approach for

Construction PPPs

 Description of process to calculate the PPPs  Item trees  Codes

VALIDATION

• f Construction Survey

 Suggested process for intra and inter-country validation  Steps and checks to be carried out  Additional information for validation  Initial Resource Mixes

Draft Operational Guide chapter on Validation of the Construction and Civil Engineering Survey has been finalized and circulated by the GO

The method for calculating construction PPPs and initial results of the survey will be further discussed at the forthcoming TAG meeting in September

23

Construction Survey

Step 1

Materials Sub-Heading: 38 material inputs Equipment Sub-Heading: 5 types of equipment hire services Labor Sub-Heading: 7 categories of construction labor

Establishment of Sub-Headings; selection of important items for each BH (Residential and Non-residential buildings and Civil engineering works) per country

Step 2

Sub-Headings to be treated as “Basic Headings” PPPs to be calculated using CPD

Calculation of Sub-Heading PPPs

OVERVIEW of approach for Construction PPPs

24

Construction Survey

Step 3

Establishment of Sub-Heading Weights

Actual Levels Considered as Aggregate or BH Nominal Expenditure (LCU) RM Shares RM weighted Nominal Expenditure (LCU) Aggregate Aggregate level GFCF 120 Category Aggregate level CONSTRUCTION 70 Group Aggregate level RESIDENTIAL BUILDINGS 18 Class Aggregate level Residential buildings 18 BH Aggregate level Residential buildings Sub-Heading Basic Heading Materials 70% 12.6 Sub-Heading Basic Heading Equipment 5% 0.9 Sub-Heading Basic Heading Labor 25% 4.5

25

Construction Survey

Step 4

Using the established Sub-Headings weights, the Sub-Heading PPPs can be aggregated to BH, Class, Group and finally up to the level of Construction Category, using the selected aggregation method (EKS, GK, Iklé)

Aggregation of PPPs

Step 5

Adjustment for productivity can be done by applying factors based on specific capital and productivity levels of a country The work on the productivity adjustment in the 2011 ICP round is still

• ngoing and it will be discussed at the forthcoming TAG meeting in

September

Adjustment for Productivity

26

Construction Survey

INTRA country validation

Equivalent materials Unit of measurement and dimensions

VALIDATION of Construction Survey

Prices

INTER country validation

RCs together with NCs, check the completeness and correctness of the data submission and conduct validation of price and metadata across countries Initial Data Validation Importance Other information Completeness NCs together with national construction experts verify completeness and correctness of the information collected during the survey Validation of price data using Validation Tables Importance Resource Mixes Construction PPPs Approximate Project Prices

Machinery and Equipment Survey

 There is a need to split selected Machinery and Equipment Goods items  Unspecified items will be categorized to identify comparable brands and models  The Global Office recommends to split during the validation process  Data collected from the field will be used to confirm ex-ante splitting assumptions  Regrouping is possible especially when there is no clear demarcation  Only items similar to GCL ones will be retained for linking; others will remain region

28

Water Survey

 Following requests from Regions, the Global Office has initiated the revision of the Water Tariff operation materials  The Objective was to simplify the data collection form and amend the Operational Guide where more clarification is needed  The new data collection form features the harmonization of issues related to taxes, especially the Value Added Tax (VAT) and Sales Tax  It requires the countries to submit actual bills as metadata for validation purposes together with Internet links (URL) to relevant utility companies web site for easy access and reference  An example of form is provided to show how to handle the calculation  It allows countries to provide data sources through

29

• V. Regional Price Data Review

 Process of data validation followed in each region  Tools used for data validation  Constrains/challenges faced  Presentation of the validation tables for the second quarter price data for selected basic headings  Lessons learned

30

• VI. Global Validation
• A. Price Data

 Objectives  Issues reported  Summary Charts  Quality Indicators Graphs  Price Spreads by Regions  Outlier and Leverage Analysis  PLI Graphs  Summary of Issues by Region

31

Objectives

Input Data  All analysis carried out and presented are based on preliminary data submitted by the ICP Regional Coordinators  Substantial changes are expected to be introduced during the further validation process by the RCs and the participating countries  Present and discuss methods and approaches for data validation at the global level  Identify main areas for data quality improvements  Discuss plans for further validation activities Presentation Objectives

32

Issues Reported

Data integrity issues

 Missing prices for many basic heading, classes, groups and categories  Duplicated item codes in average price files  Reporting prices for regional basic headings (over the official 155)

Overall data quality

 Data sources (CPI)  Item List issues (Number of GCL items vs. Number of regional items)  Reporting currency issues on average prices

Intra country validation

 Data entry Errors (UoM, Decimal points, Currency Units)  Low number of price quotations  High variation coefficients  Very low Min/Max Ratio Limit

33

Issues Reported

The feasibility of the linking approach

 Choice of base country – Option to have the region as a base  High basic heading coefficient of variation for PPP Prices  High variation of Exchange rate/ PPP Price Ratios  Too wide ranges of Basic heading Price level index (BH PLI)  Importance of GCL items  Same for both Regional and Global comparisons?  Brand levels  How to ensure consistent interpretation across regions?  Low comparability of services and/or possibly different approaches across regions  E.g. telecommunication, air transport, pharmaceuticals, medical services  Reference PPP  Different regions have different BHs for which reference PPPs are used  Low coverage BHs (BHs with only a few GCL products )  Consider how to calculate the linking factors?

34

Summary Charts

35 50 100 150 200 250 300 350 400

Africa LAC Asia

• W. Asia

Number of GCL Items for which x% of the countries collected prices

x<25%: Q1 x<25%: Q2 25<=x<50%: Q1 25<=x<50%: Q2 50<=x<75%: Q1 50<=x<75%: Q2 75<= x<100%: Q1 75<= x<100%: Q2 x=100%: Q1 x=100%: Q2

Summary Charts

36 10 20 30 40 50 60 70 80

Africa LAC Asia

• W. Asia

Number of BHs for which x% of the countries collected prices

x<25%: Q1 x<25%: Q2 25<=x<50%: Q1 25<=x<50%: Q2 50<=x<75%: Q1 50<=x<75%: Q2 75<= x<100%: Q1 75<= x<100%: Q2 x=100%: Q1 x=100%: Q2

Summary Charts

37 5 10 15 20 25 30 Africa: Q1 Africa: Q2 LAC: Q1 LAC: Q2 Asia: Q1 Asia: Q2 WAS: Q1 WAS: Q2 17 12 10 12 5 6 29 24

Average number of GCL items with high CVs reported by country

Quality Indicators Graphs

200 400 600 800 1000 1200

GIN COM MRT TGO TCD TUN NAM GNB NER STP CIV BEN BDI GAB GHA SLE CAF SYC BFA SEN COG MLI MDG COD MAR GMB KEN RWA CMR MUS CPV DZA SDN LBR MWI UGA ZAF TZA EGY ZMB SWZ MOZ ZWE LSO BWA NGA

Number of items priced

Number of Item Priced

Africa- Q1 Total GCL 38

Quality Indicators Graphs

5 10 15 20 25 30 35 40 45 50

Rice Bread Beef and veal Poultry Fresh or frozen fish … Cheese Fresh or chilled fruit Fresh or chilled … Frozen or preserved … Confectionery, … Mineral waters, soft … Tobacco Garments Garments Maintenance of … Furniture and … Major household … Small electric … Small tools and … Household services Pharmaceutical … Pharmaceutical … Medical Services Motor cars Motor cycles Other services for … Passenger transport … Telephone and … Recording media Garden and pets Newspapers, books … Catering services Hairdressing and … Other personal … Bread Pork Fresh or frozen fish … Preserved fish and … Eggs and egg-… Frozen, preserved … Fresh or chilled … Frozen or preserved … Food products n.e.c. Coffee, tea and … Clothing materials … Garments Garments Cleaning and … Repair and hire of … Furniture and … Major household … Glassware, … Household services Telephone and … Major durables for … Catering services Catering services Personal care …

Number of countries

Availabilty per Basic Heading

Africa - Q1

GCL Regional List

39

Quality Indicators Graphs

50 100 150 200 250 300 350 400 450

LAO NPL IND CHN BTN FJI MDV LKA MYS MMR IDN BRN VNM PAK MAC SGP KHM MNG HKG TWN THA PHL

Number of items priced

Importance and Number of Item Priced

Asia & Pacific - Q1

Total items Importance Single

40

Quality Indicators Graphs

1 2 3 4 5 6 7

Rice Rice Other cereals and … Other bakery … Pasta products Beef and veal Lamb, mutton and … Poultry Fresh or frozen fish … Preserved fish and … Preserved milk and … Eggs and egg-… Other edible oils … Fresh or chilled fruit Frozen, preserved … Fresh or chilled … Fresh or chilled … Frozen or … Frozen or … Confectionery, … Food products n.e.c. Food products n.e.c. Coffee, tea and … Spirits Tobacco Garments Garments Garments Cleaning and … Footwear Gas Furniture and … Household textiles Major household … Repair of … Major tools and … Non-durable … Pharmaceutical … Pharmaceutical … Other medical … Medical Services Paramedical services Motor cars Fuels and lubricants Maintenance of … Passenger … Passenger … Postal services Telephone and … Audio-visual, … Audio-visual, … Recording media Other recreational … Veterinary and pet … Cultural services Catering services Catering services Personal care … Jewellery, clocks … Other services

CV Values

Variation Coefficient per List

Asia & Pacific - Q1

GCL Regional List

41

Quality Indicators Graphs

0% 5% 10% 15% 20% 25% 30% 35% 5000 10000 15000 20000 25000 30000 35000 40000 45000

CUB PAN HND ECU CRI HTI PRY COL SLV VEN DOM BRA URY BOL NIC PER

Number of price quotations

Analysis of Price Quotations

Latin America & Caribbean - Q1 Price quotations Single quotations

Share of single quotations

42

Quality Indicators Graphs

20 40 60 80 100 120 140 160 180 CV Value

Range of Coefficient of Variation

Latin America & Caribbean - Q2

Low values (-) High values (+)

43

Quality Indicators Graphs

200 400 600 800 1000 1200 1400

Rice Bread Beef and veal Poultry Fresh or frozen fish … Cheese Fresh or chilled fruit Fresh or chilled … Frozen or … Confectionery, … Coffee, tea and … Beer Garments Garments Footwear Gas Repair of furniture Major household … Glassware, … Non-durable … Pharmaceutical … Pharmaceutical … Other medical … Motor cars Motor cars Maintenance of … Passenger … Telephone and … Audio-visual, … Recording media Garden and pets Newspapers, books … Catering services Personal care … Other personal … Other bakery … Lamb, mutton and … Fresh milk Other edible oils … Fresh or chilled fruit Frozen, preserved … Fresh or chilled … Sugar Food products n.e.c. Spirits Clothing materials … Garments Garments Cleaning and … Maintenance of … Household textiles Major tools and … Pharmaceutical … Pharmaceutical … Therapeutic … Maintenance of … Audio-visual, … Newspapers, books … Personal care …

CV Values

Variation Coefficient per List

Western Asia- Q1

GCL Regional List

44

Quality Indicators Graphs

10000 20000 30000 40000 50000 60000 CV Value

Range of Coefficient of Variation

Western Asia - Q2

Low values (-) High values (+)

45

Price Spreads by Region

46

Egypt Liberia Cuba Uruguay Maldives Taiwan, Province of China Oman Palestinian Territory

100 200 300 400 500 600 700 800 900 1000

110112101 - Beef, Fillet

Africa LAC Asia WAS

Helps detect major outliers

Price Spreads by Region

47

Egypt Gabon Cuba Uruguay Maldives Taiwan, Province

• f China

Oman Palestinian Territory 5 10 15 20 25 30 35 40 45

110112101 - Beef, Fillet

Africa LAC Asia WAS

Mauritius

Once major

• utliers are

excluded from analysis, other

• utliers appear.

Price Spreads by Region

48

Morocco Tunisia Cuba Uruguay Brunei Darussalam Myanmar Palestinian Territory United Arab Emirates

2 4 6 8 10 12 14 16

110112104 - Beef, for stew or curry

Africa LAC Asia WAS

Helps analyze whether regional average prices are close, and detect quality differential across regions.

Price Spreads by Region

49

Egypt Gabon Cuba Dominican Republic Myanmar Philippines Iraq Palestinian Territory

20 40 60 80 100 120

110321103 – Men’s Nike/Adidas/Asics Sports Shoes

Africa LAC Asia WAS

Helps detect issues of pricing

• riginal vs.

imitation

Price Spreads by Region

50

Congo Kenya Nicaragua Paraguay

Myanmar Thailand

Oman Palestinian Territory

0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

110111305 - Sliced White bread

Africa LAC Asia WAS

Helps detect error is product code conversions.

Price Spreads by Region

51

Burkina Faso Algeria Brazil Cuba Myanmar Taiwan, Province of China Iraq Jordan

5 10 15 20 25 30 35 40 45 50

110732103 - Interurban Bus (InterCity Bus) - 50 Km

Africa LAC Asia WAS

Helps detect major outliers

Price Spreads by Region

52

Burkina Faso Algeria Cuba Haiti Myanmar Taiwan, Province of China Iraq Jordan

1 2 3 4 5 6 7 8 9 10

110732103 - Interurban Bus (InterCity Bus) - 50 Km

Africa LAC Asia WAS

Once major

• utliers are

excluded from analysis,

• ther outliers

appear.

Outlier and Leverage Analysis

Overall price level for Oman is 0.78 Price levels for BHs 1104411 (Water) and 1104511 (Electricity) are very low and are pushing down the

• verall price level

The two Oman BHs are showing as extreme negative residuals . Their leverage is not significant, that is, they do not appear to deviate significantly from their mean, probably because the mean is also low.

53 Source: Validation Report by Bettina Aten, VEG member

Outlier and Leverage Analysis

However, at least one of the Oman BHs has an extremely high influence on its predicted value, and another one is also significantly influential as seen by their Cook’s D statistics, which measures the influence

• nce that observation is

removed.

54 Source: Validation Report by Bettina Aten, VEG member

Outlier and Leverage Analysis

This anomalous set of Item prices for Oman in BH 1104511 (Electricity) is seen more easily in graph form, where each country is on the horizontal axis and the log of the price relative is on the vertical axis.

55 Source: Validation Report by Bettina Aten, VEG member

PLI Graphs

…and taking ratio of A/B:  If > 1, GCL PLIs are lower than regional PLIs  If < 1, GCL PLIs are higher than the regional PLIs  If 1, PLIs for both lists are identical These ratios can be analyzed by studying:  Spread of ratios over the BHs across the countries  Geomean of all ratios and minimum and maximum ratios for a country  Number of ratios below and above certain thresholds  CV of ratios for a country

To evaluate feasibility and plausibility of the Global Core List approach, we can compare BH and overall PLIs calculated:

…based on:  All items (A)  Global Core List items (B)  CPD, Region = 1

56

PLI Graphs

 Test how well the GCL items represent the regional PPPs  Identify potential problems with priced GCL and regional items, in case these have not been identified during earlier validation  Note: PLI Ratios do not detect cases where problems are associated to both GCL and regional items  The aim is to present and discuss the approach  No concrete conclusions are to be derived from this presentation The graphs presented are based on preliminary price data Comparison of PLI Ratios can be used to If outlier GCL PLIs are indentified, and validation cannot solve these cases, the respective BH PPPs may need to be deleted (??)

57

PLI Graphs

0.00 0.50 1.00 1.50 2.00 2.50

20 40 60 80 100

ESCWA, Q1

Iraq Jordan Oman Palestinian Territory Qatar United Arab Emirates

UAE: Gardens and pets Regional PLI 2.21 times higher than GCL PLI Reason: Extreme price variation within the BH Qatar: Gardens and pets Regional PLI 0.24 times lower than GCL PLI Reason: Extreme price variation within the BH UAE: Electricity Regional PLI 1.89 times higher than GCL PLI Reason: Problematic BH due to reference quantities Qatar: Fuels Regional PLI 1.63 times higher than the GCL PLI Reason: One extreme regional item

58

PLI Graphs

0.5 1 1.5 2 2.5 3 3.5 4

10 20 30 40 50 60 70 80 90 100

ESCWA , Q2

Bahrain Iraq Jordan Kuwait Oman Palestinian Territory Qatar United Arab Emirates Yemen

59

PLI Graphs

Indicator Bahrain Iraq Jordan Kuwait Oman Geomean 1.29 1.05 1.01 1.04 1.08 Min 0.40 0.32 0.32 0.32 0.32 # Below 0.75 11 26 30 27 23 Max 20245.50 13570.90 11855.26 20245.56 23639.68 # Above 1.33 7 12 12 12 13 CV 241936 136307 123604 207831 228634 Indicator Palestinian Territory Qatar UAE Yemen Total Geomean 1.02 1.09 1.04 0.88 Min 0.23 0.32 0.32 0.07 # Below 0.75 30 22 26 23 218 Max 23302.81 20245.52 38377.79 7.04 # Above 1.33 9 14 10 9 98 CV 240697 204267 384841 95

60

Summary of Issues by Region

AF AS LAC WA TOTAL Data integrity issues 2 1 1 4

Missing prices for many Basic Headings, Classes, Groups, and Categories

√ 1

Duplicated item codes in average price files

√ √ 2

Reporting prices for regional basic headings (over the official 155)

√ 1 Overall data quality 2 1 2 5

Data sources (CPI)

√ √ 2

Item List issues (Number of GCL items vs. Number of regional items)

√ 1

Reporting currency issues on average prices

√ √ 2 Intra country validation 3 2 2 7 Data entry Errors (UoM, Decimal points, Currency Units) √ √ 2 Low number of price quotations √ 1 High price observation variation coefficients √ √ √ 3 Inter country validation 4 1 3 4 12 Choice of base country (Option to have the region as a base) √ √ √ √ 4 High BH variation coefficients (dispersion of PPP-Ratios for a BH) √ √ √ 3 High country variation coefficients (dispersion of PPP-Ratios for a country) √ √ √ 3 High variation of Basic Heading Price level indices (BH PLIs) √ √ 2 Importance information (too soon to conclude) TOTAL 11 3 7 7 28

61

• VI. Global Validation
• B. Expenditures

 Objective and Methodology  Overall Summary of Findings  Household Consumption  Government  Gross Fixed Capital Formation  Problematic Basic Headings  Misreported Basic Headings

62

Objective and Methodology

Data/Information Needed

 Each country’s 2009 and 2005 Data National Accounts Data (GDP Expenditure by BH) Population figure Exchange Rate  Regional country clustering

Conduct GDP Expenditure temporal Analysis on country and regional level for 2009 and 2005 Relevant ICP Reference

 ICP Classification (ICP Operational Guide 2.2)  Information on the ICP Classification (ICP Operational Material B.1.07)

Steps

 Country Level Analysis Validate SNA Compliance for both 2009 and 2005 Temporal Analysis  Regional Level Analysis GDP structures or country shares Per Capita expenditures for HHC  Regional Level Temporal Analysis

63

Overall Summary of Findings

Asia Africa CIS LAC WA Caribbean Pacific Isl. Singleton

<> 0 5 30 8 10 1 … … 1 < 0 1 2 1 2 … … … 1 > 0 2 9 1 1 … … … … 12 47 … 5 8 … … 1 8 18 5 4 5 … … 1 1 10 3 4 4 … … 1

(*)

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Maximum number of countries that fail the criteria S>5% Skew St. Skew pc Maximum number of countries that comply the criteria

(*) <>0 :Should Be Non Zero; S>5%: Share > 5% of GDP;

• St. : Variation of structure; pc: Variation of per capita values

Household Consumption

Asia Africa CIS LAC WA Caribbean Pacific Isl. Singleton

4 22 6 6 1 … … 1 1 2 1 … … … … … 1 3 … … … … … … 12 47 … 5 8 … … 1 6 16 5 4 5 … … 1 1 10 3 4 4 … … 1

(*)

(*) <>0 :Should Be Non Zero; S>5%: Share > 5% of GDP;

• St. : Variation of structure; pc: Variation of per capita values

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<> 0 < 0 > 0 Maximum number of countries that fail the criteria S>5% Skew St. Skew pc Maximum number of countries that comply the criteria

Government

Asia Africa CIS LAC WA Caribbean Pacific Isl. Singleton

5 30 8 10 1 … … 1 … 1 1 1 … … … … 1 1 … 1 … … … … 11 47 … 4 6 … … 1 4 9 4 2 4 … … 1 … 5 … 1 3 … … 1

(*)

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<> 0 < 0 > 0 Maximum number of countries that fail the criteria S>5% Skew St. Skew pc Maximum number of countries that comply the criteria

(*) <>0 :Should Be Non Zero; S>5%: Share > 5% of GDP;

• St. : Variation of structure; pc: Variation of per capita values

Gross Fixed Capital Formation

Asia Africa CIS LAC WA Caribbean Pacific Isl. Singleton

2 2 1 10 1 … … … … … … 2 … … … … … 1 … 1 … … … … 11 47 … 5 6 … … 1 7 18 4 4 2 … … … 1 9 1 4 1 … … 1

(*)

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<> 0 < 0 > 0 Maximum number of countries that fail the criteria S>5% Skew St. Skew pc Maximum number of countries that comply the criteria

(*) <>0 :Should Be Non Zero; S>5%: Share > 5% of GDP;

• St. : Variation of structure; pc: Variation of per capita values

Problematic Basic Headings

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1102311 Narcotics 1112211 Prostitution 1112611 FISIM 1113111 Purchases by residential households in the rest of the world 1113112 Purchases by non-residential households in the economic territory of the country 1201111 Individual consumption expenditures by NPISHs 1301111 Housing 1302111 Pharmaceutical products 1302112 Other medical products 1302113 Therapeutic appliances and equipment 1302121 Out-patient medical services 1302122 Out-patient dental services 1302123 Out-patient paramedical services 1302124 Hospital services 1302221 Intermediate consumption 1302241 Net taxes on production 1302251 Receipts from sales 1303111 Recreation and culture 1304111 Education benefits and reimbursements 1304221 Intermediate consumption 1304231 Gross operating surplus 1304241 Net taxes on production 1304251 Receipt from sales 1305111 Social protection 1401121 Intermediate consumption 1401131 Gross operating surplus 1401141 Net taxes on production 1401151 Receipts from sales 1601111 Opening value of inventories 1601112 Closing value of inventories 1602111 Acquisitions of valuables 1602112 Disposals of valuables 1302231 Gross operating surplus Codes Heading

The following items have been reported to be problematic during previous ICP rounds

Misreported Items

 Should Be Non Zero  Should Be Negative  Should Be Positive A basic headings is referred to as misreported if it fails to satisfy any of the criteria below We performed an assessment of misreported items per region and

• ur findings are summarized in

the following Excel table… Misreported items should be corrected before the MORES are transmitted to the Regional Office for processing.

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• VI. Global Validation
• C. Importance

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 Priced GCL items – Overlap between regions  Priced GCL items – Overlap across 4 regional lists  Basic Heading Level Summary Statistics  Product Level Summary Statistics  Improvement for Importance Indicators

Priced GCL items – overlap between regions

Total 618 Africa Asia Latin

America

Wester n Asia Africa

573 371 421 573

Asia

371 403 401 394

Latin

America

421 401 445 445

Wester n Asia

573 394 445 608

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Priced GCL items - Overlap across 4 regional lists

In all 4 lists In 3 lists In 2 lists In 1 list*

291 222 85 8

*GCL products that are only on 1/4 list (except Fast-Evolving Technology Products): 110211104 Bailey's Irish Cream 110212102 Red wine, Bordeaux Supérieur 110312127 Boy's Corduroy Pants 111231101 Children's wrist-watch (Only WA has prices for these)

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Basic Heading Level Summary Statistics

(a) BH level coverage of priced GCL items:

BH Coverage Africa* (47) Asia (23) LAC (17) Western Asia (11) 82-92 BHs

(Approx. 91-100% covered)

19% (9) 61% (14) 28% (5) 73% (8)

73-81 BHs

(Approx. 81-90% covered)

11% (5) 26% (6) 11% (2) 18% (2)

46-72 BHs

(Approx. 51-80% covered)

32% (15) 13% (3) 39% (7) 0%

18-46 BHs

(Approx. 21-50% covered)

36% (17) 0% 17% (3) 9% (1)

1-17 BHs

(Approx. 1-20% covered)

2% (1) 0% 5% (1) 0%

Average Coverage

55BHs 81BHs 60BHs 82BH

*Percentage share of countries in the coverage range (The number of countries).

• Total number of BHs in GCL is 92.
• Africa’s data based on Q1 and Q2 data submission. Others based on the Q2 submission.

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Percentage of Countries in the region by the level of BH coverage

Basic Heading Level Summary Statistics

(b) BH level coverage of important GCL items:

BH Coverage Africa* (47) Asia (23) LAC (17) Western Asia (11) 82-92 BHs

(Approx. 91-100% covered)

13% (6) 0% 0% (5) 27% (3)

73-81 BHs

(Approx. 81-90% covered)

4% (2) 52% (12) 12% (2) 18% (2)

46-72 BHs

(Approx. 51-80% covered)

23% (11) 39% (9) 29% (7) 36% (4)

18-46 BHs

(Approx. 21-50% covered)

34% (16) 9% (2) 47% (3) 18% (2)

1-17 BHs

(Approx. 1-20% covered)

26% (12) 0% 12% (1) 0%

Average Coverage

40BHs 68BHs 42BHs 65BH

*Percentage share of countries in the coverage range (The number of countries).

• Total number of BHs in GCL is 92.
• Africa’s data based on Q1 and Q2 data submission. Others based on the Q2 submission.

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Percentage of Countries in the region by the level of BH coverage

Product Level Summary Statistics

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(a) GCL Product level:

Imp / Priced Africa* (47) Asia (23) LAC* (17) Western Asia (11) 100% ≧ x >90%

14 5 2 1

90% ≧ x >80%

6 5 4 1

80% ≧ x >70%

6 4 2

70% ≧ x >60%

3 4 4 1

60% ≧ x >50%

6 2 2 1

50% ≧ x >0%

3 3 3 5

Regional Average

57% 76% 74% 52%

Ratio of Important items over Priced items*

Product Level Summary Statistics

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(b) GCL Product level:  Priced in only 1 country

• r not available in any country in the region

 Important to only 1 country in the region

Africa Asia LAC Western Asia Priced in 1 or 0 country 3 26 39 5 Important in 1 country 26 103 7

Improvement for Importance Indicators

(3) Check the products with # of obs. higher than the country's average (4) Check neighboring countries (with similar economic structures, geographical location, etc.)

 Suggest to country that this product may be important  Suggest to countries modifying their importance indicators based on findings from neighboring countries

(1) Check whether each basic heading has important item (Country level)

 Identify at least 1 item as important per BH

(2) Check whether each item is declared important in at least 1 country (Regional level)

 For each product, identify at least one country in the region where the product is important

Solutions to be considered:

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• VII. Upcoming Activities

And Next Steps

 Major Milestones and Activities for 2012 and 2013  Timetable HHC Data Submission  Timetable NA Data Submission  Timetable for Special Surveys  Timetable for Computation of preliminary PPPs

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Major Milestones and Activities for 2012

June August July September  Submission of 3rd and 4th quarters price data for LAC/Asia/Africa/WA (end

June) and GO computation of approximate Nat. Ann. Averages + Regional PPPs for LAC/Asia/Africa/WA (mid July) Or Submission of preliminary Nat. Ann. Average data + Regional PPPs for LAC/Asia/Africa/WA (end June / mid July)  Submission of Nat. Ann. Average data + Preliminary Regional PPPs for OECD/Eurostat and CIS (end June / mid July)  Transmission of preliminary data to CoTaf/VEG (end July)  TAG, RC, CoTaf and VEG meetings (September)  Testing of methods and preliminary results (August)  Consolidate TAG recommendations and include in report to the Executive Board (September-October)  Executive Board meeting (November)  Report to UNSC (November)

October 2012

 Interim Report to the Executive Board (beginning July)

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November

Major Milestones and Activities for 2013

Jan-Mar April June Sep-Nov  Submission of final national annual average price data for all regions

 Submission of preliminary 2011 national accounts data  Submission of FINAL FINAL data  Executive Board meeting  Report to UNSC

2013

 Interim Report to the Executive Board

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November

 RC/TAG/VEG/CoTaf meetings

February

 Executive Board meeting  Release of Global PPPs data

December September

 RC/TAG/VEG/CoTaf meetings

May-Aug

 Submission of data updates

Timetable HHC Data Submission

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HHC Data Africa Asia CIS LA CA WA Pacific Eurostat- OECD Singl. Q3 2011 Aug’12 Jul’12 Jan’12 Jan’12 Nov’12 Q4 2011 Aug’12 Jul’12 Jun’12 May’12 Jun’12 Nov’12 Q1 2012 Aug’12 May’12 Jul’12 Jul’12 Q2 2012 Aug’12 Aug’12 Sep’12 Sep’12 Q3 2012 Nov’12 Nov’12 Dec’12 Q4 2012 Feb’13 Jan’13 Mar’13 Annual Jan’13 Mar’13 Jun’12 (P) Dec’12 Feb’13 Jan’13 Jun’13 Jun’12 (P) Dec’12

Timetable NA Data Submission

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National Accounts Africa Asia CIS LA CA WA Pacific Eurostat- OECD Singl. LATEST YEAR

Basic Heading Final

Aug’12 Dec’11 Dec’11 Dec’11 Jul’12 Feb’12 N/A Mar’12 REFERENCE YEAR

Major Aggregates Premilinary

Dec’12 Dec’12 Apr’13 Dec’12 Mar’13 Dec’12 N/A Dec’12

Final

Jun’13 Jun’13 Dec’13 May’13 Jul’13 May’13 N/A Dec’13 Dec’12

Basic Heading Premilinary

Dec’12 Dec’12 Apr’13 Dec’12 Mar’13 Dec’12 N/A Dec’12

Final

Jun’13 Jun’13 Dec’13 May’13 Jul’13 May’13 N/A Dec’13 Dec’12

Timetable for Special Surveys

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ICP Component Africa Asia CIS LA Survey Subm. Survey Subm. Survey Subm. Survey Subm. Water 2011 2012 Dec’12 2012 Dec’12 Machinery and Equipment 2011 Q3’12 Q4’12 Q4’11 Dec’12 2011 May’12 Q4’11 Jun’12 Construction 2011 Q3’12 Q4’12 Q3’11 Dec’12 2011 May’12 Q3’11 Jul’12 Housing Rents Q3’12 Q4’12 2011 Sep’12 2011 Jun’12 Quantity Q3’12 Q4’12 2012 Sep’12 2012 Dec’12 2012 Jul’12 Compensation LY Q1’12 Jul’12 Q1’12 Sep’12 2011 Q3’12 Q4’12 Q4’12 Apr’13 2012 Dec’12 Q4’12 Apr’13 Private Education 2011 Q2’12 Q3’12 Q1’12 Jul’12 Q1’12 Jul’12

Timetable for Special Surveys

84

ICP Component Caribbean WA Eurostat-OECD Singletons Survey Subm. Survey Subm. Survey Subm. Survey Subm. Water 2011 2012 Dec’12 2012 Dec’12 Machinery and Equipment 2011 Q3’12 Dec’12 Q4’11 Jun’12 2011 Jun’12 Q4’12 Dec’12 Construction 2011 Q4’12 Dec’12 Q4’11 Jul’12 2011 Oct’11 Q4’12 Dec’12 Housing Rents Q3’12 Dec’12 2011 Apr’12 Quantity Q4’12 Mar’13 2012 Dec’12 2012 Dec’12 (P) Q3’12 Dec’12 Compensation LY Q1’12 Jul’12 2011 Q4’12 Mar’13 Q4’12 Apr’13 2012 Dec’12 (P) Q3’12 Dec’12 Private Education 2011 May’12 Jul’12 Q1’12 Jul’12

Timetable for Computation of PPPs

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ICP Data Submissions 2012 2013 Q2 Q3 Q4 Q1 Q2 Q3 Q4 HHC Preliminary Price Data Submission NA LY Data Submission Calculation of Preliminary HHC PPPs Private Education Data Submission Machinery and Equipment Data Submission Construction Data Submission Housing Data Submission HHC Final Price Data Submission NA 2011 Preliminary Data Submission Compensation Data Submission Calculation of GDP Preliminary PPPs NA 2011 Final Data Submission Calculation of Final PPPs

• VIII. Recap of Meeting Decisions

86

Meeting Decisions

87

Data Validation Recommendations

 Thorough intra- and inter-validation needed at regional level with focus on BHs with high NA Expenditures  Calculation of annual averages to be discussed at next RC meeting  Build complete tableau of price, NA, and importance data availability by country  Indicate major BHs where many countries in a region did not price GCL items

Metadata Questionnaires

 Survey Framework Questionnaire to be circulated in 4 languages to countries (prefilled with available info) and completed by Dec. 2012  Quality Assurance Checklists to be circulated in 4 languages  Country Checklist to be completed by Mar. 2013  Region Checklist to be completed by Dec. 2013  GO Checklist to be completed by Mar. 2014  NA QA supplementary questionnaire proposed by Asia very useful but optional to other regions

Special Surveys

 Construction: Productivity adjustment yet to be discussed by TAG  Equipment: GO to examine item splitting done by regions

Meeting Decisions

88

Immediate Data Submission Deadlines

 End June: submission of preliminary HHC average price data (shop items) + preliminary LY NA data + validated importance indicators  Aug 10, 2012: final deadline for submitting updated HHC average price data (shop items) + preliminary LY NA data + validated importance indicators

National Accounts

 Proposal for Operational BH Classification to be provided by the GO in September for discussion at the RC meeting  RCs will decide whether the Operational Classification, if approved, should be conveyed to TAG and EB for information

Importance

 Validation of importance indicators to be conducted before next RC meeting  GO to send to RCs guidance on validating importance

Meeting Decisions

89

Upcoming Meetings and Major Activities

 TAG meeting: 17-18 September 2012, to be attended by RCs  RC meeting: 19-21 September 2012:  presentation on global validation findings and recommendations  agreement will be reached as when the RCs will submit updated/improved data based on VEG/GO findings or confirm data  VEG and GO to thoroughly validate data (Jul-Aug) and submit findings to RCs before next RC meeting  TAG and CoTaf to thoroughly test linking methods, importance, and extra/under pricing of GCL items before their next meeting  GO to report to EB in November 2012 on TAG findings and risk assessment

GO reminders

 GO to send data submission formats  GO to ask RCs for the size of their matrix (number of items and countries)  GO to circulate meeting minutes

Data and Metadata for VEG and CoTaF

List of data and metadata to be provided to the Validation Expert Group (VEG) and Computation Task Force (CoTaF) for the validation, testing of methods, and computation of preliminary results:  Validated quarterly/annual average prices for both Global Core and Regional items (national, sub-national, urban/rural)  Information on availability and importance  Validation tables including validation indicators (Number of price quotations, Min prices, Max prices, Min/Max price rations, Variation coefficients and Outlier indicators)  Preliminary PPPs by the ICP Classification  Local currencies and quarterly/annual average exchange rates of local currencies  Population, for the latest available year  Major Aggregates for the latest year  Basic Heading expenditure values and underlying metadata (MORES) for the latest year  GDP Exhaustiveness questionnaire  NA Quality Assurance questionnaire

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