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A term used in association with additive aggregation methods. In the course of expressing the expenditures on basic headings in a common currency, additive aggregation methods value the expenditures at international prices, where an international price for a basic heading is defined as the average of the national prices for the basic heading prevailing in participating countries. The average may be weighted or unweighted, PPP adjusted or unadjusted. It may be an average of prices or an average of price structures.

In the GK method, for example, the average is defined as a quantity-weighted arithmetic average of the national prices adjusted by the global PPPs across all countries.

Source Publication:
Eurostat, OECD, 2007, Eurostat-OECD Methodological Manual on Purchasing Power Parities, OECD, Paris – Annex VII, Glossary of terms and abbreviations.

Statistical Theme: Prices and purchasing power partities

Created on Thursday, July 12, 2007