Global Purchasing Power Parities and Real Expenditures - Afristat

202 Global Purchasing Power Parities and Real ExpendituresBasic heading. The lowest level of aggregation of items inthe GDP breakdown for which parities are calculated. Intheory, a basic heading is defined as a group of similar welldefinedgoods or services. In practice, it is defined by thelowest level of final expenditure for which explicit expenditureweights can be estimated. Thus, an actual basic headingcan cover a broader range of products than is theoreticallydesirable. Basic headings are the building blocks of a comparison.It is at the level of the basic heading that expendituresare defined, products selected, prices collected, pricesedited, and PPPs first calculated and averaged.Basket. A term often used for the common list of welldefinedgoods and services from which countries participatingin a comparison make a selection of products toprice for the purpose of compiling PPPs. Also referred to as“product list” or “item list.”Bias. A systematic error in a PPP or volume index. Bias canarise for a number of reasons, including failure to respecteither representativity, comparability, or consistency; theprice collection and measurement procedures followed; orthe calculation and aggregation formula employed.Bilateral comparison. See “binary comparison.”Binary comparison. A price or volume comparison betweentwo countries that draws upon data only for those twocountries. Also referred to as a “bilateral comparison.”Binary PPP. A PPP between two countries calculated usingonly the prices and weights for those two countries.Bridge country. A country that provides the link or bridgebetween two separate comparisons involving differentgroups of countries. The bridge country participates in bothcomparisons and, by doing so, enables the countries in onecomparison to be compared with the countries in the othercomparison and vice versa.Changes in inventories and valuables. Changes in inventoriesand valuables (including work in progress) consist ofchanges in (a) stocks of outputs that are still held by theunits that produced them before their being further processed,sold, delivered to other units, or used in other waysand (b) stocks of products acquired from other units thatare intended to be used for intermediate consumption orfor resale without further processing; they are measuredby the value of the entries into inventories, less the valueof withdrawals and the value of any recurrent losses ofgoods held in inventories. PPPs are not estimated directly;instead, they are imputed using PPPs for consumer goodsequipment.Characteristics. The physical and economic attributes of aproduct that serve to identify it and enable it to be locatedunder some heading of a product classification; the technicalparameters and price-determining properties of a productlisted in a product specification.Clothing and footwear. Includes expenditures on clothingmaterials; garments for men, women, and children; otherarticles of clothing and clothing accessories; cleaning, repair,and hire of clothing; all footwear for men, women, and children;and repair and hire of footwear.COFOG (classification of the functions of government).Classifies transactions by general government—includingoutlays on final consumption expenditure, intermediateconsumption, gross fixed capital formation, and capital andcurrent transfers—by function or purpose. A major use ofCOFOG is to identify which final consumption expendituresof general government benefit households individuallyand which benefit households collectively.COICOP (classification of individual consumption accordingto purpose). Classifies the individual consumptionexpenditures of three institutional sectors—households,NPISHs, and general government—by the ends that theywish to achieve through these expenditures. Individualconsumption expenditures are those that are made forthe benefit of individual households. All final consumptionexpenditures by households and NPISHs are definedas individual, but only the final consumption expendituresby general government on individual services are treated asindividual.Collective consumption expenditure by government.Expenditures incurred by general and local governmentsfor collective consumption services such as defense, jus-