{
  "title": "The Hedonic Country Product Dummy Method and Quality Adjustments for Purchasing Power Parity Calculations",
  "publication": "IMF Working Papers, December 1, 2009",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-hedonic-country-product-dummy-method-and-quality-adjustments-for-purchasing-power-parity-23420",
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  "summary": "The 2005 International Comparison Program's (ICP) estimates of economy-wide purchasing power parity (PPP) are based on parity estimates for 155 basic expenditure headings, mainly estimated using country product dummy (CPD) regressions.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Focus: Analytical framework to improve economy-wide purchasing power parity (PPP) estimates from the 2005 International Comparison Program (ICP).\n- Core concern: Parity estimates for 155 basic expenditure headings were mainly estimated using country product dummy (CPD) regressions and may be inefficient and biased."
    },
    {
      "heading": "Problem statement",
      "content": "- Identified sources of inefficiency and omitted variable bias:\n  - Use of average prices across outlets as the left-hand-side variable in CPD regressions.\n  - Inability to effectively include quality-adjusted prices of non-comparable replacements when products in outlets do not match required specifications."
    },
    {
      "heading": "Methodological contribution",
      "content": "- Proposal: An analytical framework based on panel data and hedonic CPD regressions.\n- Intended effect: Ameliorate the identified sources of bias and inefficiency in PPP estimation.\n\n---\n\n Content in this bundle\n\n- wp09271 - Annex 2 demonstrates this e\n  - wp09271 - Annex 2 demonstrates this e (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp09271 - Annex 2 demonstrates this e (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-hedonic-country-product-dummy-method-and-quality-adjustments-for-purchasing-power-parity-23420"
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    "[Markdown version](/en/publications/wp/issues/2016/12/31/the-hedonic-country-product-dummy-method-and-quality-adjustments-for-purchasing-power-parity-23420/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/the-hedonic-country-product-dummy-method-and-quality-adjustments-for-purchasing-power-parity-23420/index.json)",
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    "Authors: Mick Silver",
    "Published: December 1, 2009",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451874167.001",
    "Focus: Analytical framework to improve economy-wide purchasing power parity (PPP) estimates from the 2005 International Comparison Program (ICP).",
    "Core concern: Parity estimates for 155 basic expenditure headings were mainly estimated using country product dummy (CPD) regressions and may be inefficient and biased.",
    "Identified sources of inefficiency and omitted variable bias:",
    "Proposal: An analytical framework based on panel data and hedonic CPD regressions.",
    "Intended effect: Ameliorate the identified sources of bias and inefficiency in PPP estimation.",
    "**_wp09271 - Annex 2 demonstrates this e**"
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