International Comparison Program Overview and

Status

Fred Vogel, Global Manager

ICP, World Bank

Workshop Goals

• Review Status of Data Collection– Understand work plan/time table– Exec Board’s reporting requirements

• Need to reconcile diverging schedules• Ring Program—work plan—time table• Housing, Health, Education, Gov’t, FCF

– Work plan—time table--methodology

• Tool Pack• Executive Board issues and direction• Advocacy--Poverty

Executive Board issues for Discussion

• Progress report to donors• Minimum standards for data quality• Working paper on Fixity• Publication Policy• Policy regarding access to

– List of products and their specifications– Individual product price observations– Regional National annual average prices by

product (also Ring)

New or Updated Material

• Chapter 8 revised Government services

• Chapter 10—Basic Heading Parities

• Chapter 11—The Ring program

• Chapter 12—Housing and questionnaire

• Papers available– Equipment and Questionnaire– Construction

Data Collection Status

• Concerns– Readiness for all items– Time required from getting funding/ and

start of data collection

• Keeping informed– Executive Board direction– Agree on reporting process

Country A BFood, Clothing Footwear Survey frame work Outlets Chosen Yes or No Price collectors Trained yes or noPrice collection Beginning data collection Month FrequencyPrice submission to region Months Regional workshop to review Months

All housing except rentals Survey frame work Outlets Chosen Price collectors TrainedPrice collection Beginning data FrequencyPrice submission to region Regional workshop to review

Furnishings, household equipment Survey frame work Outlets Chosen Price collectors TrainedPrice collection Beginning data FrequencyPrice submission to region Regional workshop to review

Transport, Comm. Recreation, Rest & hotels,Misc Survey frame work Outlets Chosen Price collectors TrainedPrice collection Beginning data FrequencyPrice submission to region Regional workshop to review

Health, Education, Housing (rentals)Gov't, Equipment, ConstructionTool Pack

Bi Monthly Status report by country to Global office, Global Office summary to Executive Board

Management Principles

• You cannot manage what you do not know.

• If you do not know what you do not know, you are in deep trouble

• If you come to a fork in the road, take it? Management requires having a

road map with alternative routes.

Strategy

• Define Readiness-start-finish

• Identify warning signs

• Process to deal with problems– Survey-collection-time table– Data quality—minimum standards

• Cut-off date for start of data collection

Understanding Readiness

CPI NON CPI

Capital

City

Overlap

Between

CPI?ICP?

Other

Regionss

Readiness-Start-Finish

• Readiness– Product specs being completed– Translated– Outlets identified– Price collectors recruited trained supervised

• Start--Monthly—Quarterly by aggregate– Scope—Cap City—Nationwide?– Data Submission—Schedule – Data Submission—raw vs. averages

• Finish—Regional sign-off BH prices PPPs

Warning Signs

• Product specs not finalized• Data collection—starting by category• Data submission—ASAP and schedule• Data Quality—standards

– #products--#observations– Variability in observations– Timing, availability– Variability in PPPs

Fall back considerations• Identify “Essential” Countries

– Monitor closely/keep global office informed– Provide/request assistance

• Identify data to “move” to 2005 annual• Capital city vs. National & data to estimate• Reduce scope Consumption vs GDP in non essential countries• Cut-Off date for data collection—Make judgement on 1 July

whether third quarter data can be supplied and how to proceed in non core countries

• 0,0, zero third quarter—stage 2• 0,0, data third quarter—Make judgement,take actions in non

core countries

Access

• Product specifications

• Individual price observations

• Average product prices– Urban/rural– outlet

• Who has access?

Data Quality Standards

• Within Country– Number of products Priced by basic heading

– Number of price observations—time and space

– Variability of item prices--outliers

• Between country– Number of products—depends on BH, situation

– Consistency/ variability of price ratios

– Consistency/variability of PPPs

Country National Currency# times CV Exchange XR Price limit PPP PPPr/GM limitPrice Priced rate price Ratio Price Pri

XRP XRP/GM PPPr %

x 5.86 5 5.4 5.86 111 8.03 152 >125y 5.23 8 11.9 5.23 99 3.11 59 <80z 43.92 6 14.9 4.81 91 5.92 112

Geometric Means 5.29 5.29

CV of PPP price ratios 35.5

Average CV across all products in Basic HeadingV of PPP price ratios across all products in Basic Heading 45.7

Product 1 Fresh Mushrooms, whole, prepacked, 250-500g. Reference Quantity= 500g(limits for exchange rate and PPP price ratios = 80% to 125%

2

1

n

GMPRiSpr

Step 7 (a)

Product A B C B/A* C/A C/B1 10* 40 100 4 10 42 12* 16* 1.253 15 15* 30* 1 2 24 25 100* 4

1.71

Prices by Country Price Ratios

Geometric Means

(C/A)/(C/B) is indirect estimate of B/A

Mean using direct andindirect ratios

1.76

Compute Basic Heading Parity—simple example

Basic Heading Country A Country B PPPs PPP PPP

Rice PPP riceMilk PPP milkMeat PPP meatfruit PPP fruit

etc

Food PPP

Comparison of Parities

Readiness-Start-Finish

• Has data collection Started by country?– Product specs being completed– Yes, DK, When?– Waiting for funds– Price collectors-how long before ready?

• Monthly—Quarterly?• Scope—Cap City—Nationwide?• Data Submission—Schedule?• Data Submission—raw vs. averages

Necessary steps

• Identify “essential” countries– Monitor closely/keep global office informed– Provide/request assistance

• Warning signs– Data collection—when starting by Basic heading– Submission of data– Data quality—number of products--number of

observations—degree of variability—coverage of outlets--regions

– Response to questions and problems

Overview

I II III IV I II III IV I II III IVHousehold ConsumptionData CollectionData validation Country levelSubmit prices to regionRegional validation--quarantaReview with countriesEstimation of National annual prices Regional validation Basic Heading PPPs Review with countries

Housing, Health, Capital Formation--Gov'tComplete Specifications TranslationData CollectionData validation Country levelSubmit prices to regionRegional Validation QuarantaReview with CountriesEstimation of National annual pricesRegional ValidationBasic Heading PPPsReview with Countries

Regional PPPs Obtain 2004 Expenditure Weights PPPs for consumption PPPs at GDP Global PPPs 2004 Expenditure Weights. Prepare Ring listTranslation Data Collection Data Validation country level Submit prices to Region/Global Coord Global Validation Quaranta Estimation of ring average prices Ring validation

Obtain BH PPPs all countries, all regions Basic Heading regional PPPs Basic heading Ring PPPs Scale regional PPPs to global PPPs all countries Global PPPS/ GDP and indices

2005 2006 2007

Overview Of ICP Program

Different collection schedules

• 2005 is the reference year

• Joint responsibility– Countries within region on track– Regions on track

• Cut-off date for data collection to meet publication goals