ICP Regional Coordinators Meeting

Washington - DC, April 20-21, 2011

[06.02]

1. Objectives

2. HHC Validation Overview

4. Global validation

Outline

Submission and Validation

3. HHC Price Data

5. Schedule of Data and Metadata Submission

1. Agree on validation process and procedures

in general

2. Agree on transmission of data and metadata

3. Agree on validation process and stages during

Global validation

Objectives

• Intra-country

• For regional items (incl. CGL)

National validation

NCAs

• Inter-country

• For regional items (incl. CGL)

Regional validation

NCAs, RCAs

• Inter-country across regions

• For CGL items and regional PPPs

Global validation

NCAs, RCAs, GO

Validation stages

HHC Validation Overview

National Level Regional Level Global Level

• Quarterly Prices and Metadata• Annual Prices and Metadata

Original or Edited• Quarterly Prices and Metadata• Annual Prices and Metadata• Validation Tables• PPPs by the ICP Classification

Original or Edited

• Quarterly Prices and Metadata• Annual Prices and Metadata• Validation Tables• PPPs by the ICP Classification

Validation Queries on

• Quarterly Prices and Metadata• Annual Prices and Metadata

Validation Queries on

HHC Validation Overview

1 2

Quarterly Price Data and Metadata

HHC Price data

• Validated national quarterly average prices (whole, location types, outlet types)

• Validated sub-national quarterly average prices• Importance indicators

• Validation tables (Number of price quotations , Min prices, Max prices, Min/Max price ratios, Variation coefficients, Outlier indicators)

• Local currencies, quarterly average exchange rates of local currencies

• Metadata• RCs to GO: PPPs by the ICP Classification

Annual Price Data and Metadata• Validated national annual average prices (whole, location types, outlet types)

• Validated sub-national annual average prices• Importance indicators

• Validation tables (Number of price quotations , Min prices, Max prices, Min/Max price ratios, Variation coefficients, Outlier indicators)

• Local currencies, annual average exchange rates of local currencies

• Metadata• RCs to GO: PPPs by the ICP Classification

National Coordinators (NCAs)Intra-country and sub-national

• Quarterly data

Tasks

• Initial data validation

• Annual data

• Computation of national annual average prices

• Validation of national annual average prices (sub-regional and temporal)

Regional Coordinators (RCAs)Inter-country

• Quarterly data

• Annual data

Tasks

• Validation of average prices (QT/DT) at BH and aggregated levels

• Helping in the validation of observations, if needed• Helping in the computation and validation of national annual averages, if needed

• Validation of preliminary PPPs

• Temporal validation of average prices and preliminary PPPs

• Statistical data validation (observations and average prices)

NCAs and RCAs

• Sub-national validation

• Temporal validation (across quarters)

Global Office (GO)Inter-country across regions

Global Office

• Helping in the validation of regional prices, if needed

• Validation of linked regional PPPs

• Validation of CGL prices

• Inter-country validated Quarterly and Annual data

• Inter-country validated Quarterly and Annual PPPs

Tasks

• Helping in the validation of preliminary PPPs, if needed

• Providing validation documentation

• Validation of reference PPPs

• Validation of regional validation tables

Global Validation

• Validate data globally (GCL prices, PPPs, importance and reference PPPs)

TAG agreements• Use weighted CPD as an official calculation method

• Use CAR approach for linking regional PPPs

• Compare results of different regional linking options

Heston/Dikhanov (CAR)Linking factors are

weighted harmonic means of ratios between global and regional PPPs

Weighted CPD Model recognizes that representative or important products usually have a larger

expenditure share than do non representative or less important products. Approximate weights can be applied; for example, a

representative product could receive twice the weight of a non representative product. A weighted least squares method is used to

estimate the PPPs.

Regional average prices and PPPs should remain open for review until the global validation of

the core prices is completed

Global Validation

• This has to be taken to account by both NCAs and RCAs

Global validation of data will result in validation queries and proposals for edits

• Relating, regional data should not be published before

• Timing may be an issue

Validation of GCL Prices

Global Validation

• Validation of PLS (for each level of aggregation)

• (Regional validation within inter-country validation)

• Validation of GCL prices deflated by regional PPPs

• Between region BH PPPs

Validation of regional PPPs

Input: inter-country validated quarterly and annual average prices and quarterly and annual regional PPPs

• Validation of importance (straight and deflated prices)

• Validation of Direct vs. Indirect PPPs (for each level of aggregation)

• Global validation - matrix of 180+ countries (item, BH, aggregate)

• Validation of reference PPPs

Global Validation

• BH PPPs – implausible cases

Validation rules• Prices – variation or high/low CUP-ratios (residuals)

• Importance – if low/high CUP-ratio item + percentages

• Global office flags outliers for RCAs and NCAs

Final decisions on validation actions

• Aggregated PPPs – implausible cases

• Validation group will make final decision on used prices

• Data may be used in regional comparison without being used in global comparison

Use of data in regional and global comparisons

• Reference PPPs – implausible cases

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Quarterly Price Data and Metadata & Validation Table

Annual Price Data and Metadata & Validation Table

Q1

2011 2012 2013

Q4

Q3

Q4

Q3

Q4

Q3

Q2

Q1

Q2

Q1

Q2

Q1

PPPs by ICP Classification & Metadata

(Preliminary and Final)

Q2

Q3

Q4

Q1

Q2

Q3

Q4

P

A

A

NCs to RCs

RCs to GO

F

Schedule of Data Submission

14

THANK YOU