Subnational Purchasing Power Parities toward Integration of International Comparison Program and Consumer Price Index: The Case of the Philippines | Asian Development Bank

Subnational Purchasing Power Parities toward Integration of International Comparison Program and Consumer Price Index: The Case of the Philippines

Publication | December 2011
Subnational Purchasing Power Parities toward Integration of International Comparison Program and Consumer Price Index: The Case of the Philippines

Purchasing power parities for the 17 regions of the Philippines were produced using the conceptual framework of the International Comparison Program. Outputs could be used to study regional incidence of poverty and standards of living.

This study analyzes the plausibility of integrating the International Comparison Program with the consumer price index (CPI) by computing subnational purchasing power parities using regional prices and expenditure weights from the CPI for the Philippines. It shows that prices collected for the CPI could be used to provide reliable estimates of price levels across regions, and that regional price movements are highly correlated. The substitution effect of using year 2000 expenditure weight, however, has not been explored in this study.

Contents 

  • Abstract
  • Background
  • Objectives
  • Challenges
  • ICP and CPI: Establishing the Link between Spatial and Temporal Indexes
  • The Philippines CPI
  • Estimation Methodology: Subnational PPP
  • Major Results and Findings of the Study
  • Conclusion and Future Directions
  • Appendix: Tables and Charts by Major Commodity Groups
  • References