Global Purchasing Power Parities and Real Expenditures - Afristat

Glossary 209able as a result of the production of these goods or services(that is, taxes payable per unit of good or service produced,such as excise duties and nondeductible VAT), plus taxesthat resident enterprises may pay as a consequence of engagingin production (taxes such as payroll taxes and taxes onmotor vehicles). The former are called “taxes on products,”and the latter are called “other taxes on production.”Transitivity. The property whereby the direct PPP betweenany two countries (or regions) yields the same result as anindirect comparison via a third country (or region). It issometimes referred to as “circularity.”Transport. Includes expenditures on purchase of vehicles,operation of personal transport equipment, and transportservices.Valuables. Produced assets that are not used primarily forproduction or consumption, that are expected to appreciate(or at least not decline in real value), that do not deteriorateover time in normal conditions, and that are acquiredand held primarily as stores of values.VAT (value added tax). A tax on products collected in stagesby enterprises. It is a wide-ranging tax usually designed tocover most or all goods and services. Producers are obligedto pay to government only the difference between the VATon their sales and the VAT on their purchases for intermediateconsumption or capital formation. VAT is not usuallylevied on exports.Volume measures are obtained by using PPPs to convertfinal expenditures on product groups, major aggregates, andGDP of different countries into a common currency, valuingthem at a uniform price level. They are the spatial equivalentof a time series of GDP for a single country expressedat constant prices. They provide a measure of the relativemagnitudes of the product groups or aggregates being compared.At the level of GDP, they are used to compare theeconomic size of countries. They may be presented eitherin relation to a particular currency or as an index number.Sources:The definitions in this Glossary are based on definitionsfrom the following publications:Eurostat and OECD. 2006. Eurostat-OECD Methodological Manualon Purchasing Power Parities. Paris: OECD. http://www.oecd.org/dataoecd/59/10/37984252.pdf.Kravis, I. B., A. Heston, and R. Summers. 1982. World Product andIncome: International Comparisons of Real Gross Product. Baltimore:Johns Hopkins University Press.OECD. 2001. The System of National Accounts, 1993: Glossary.Paris: OECD. http://www.oecd.org/dataoecd/38/18/2674296.pdf.World Bank. 2007. ICP 2003–2006 Handbook. Washington, DC.http://www.worldbank.org/data/icp.