Transcript International Comparison Program (ICP)

ICP-2005 and Compilation of
Poverty-Specific PPPs
Plan of Action
Objectives
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Compile a set of regional PPPs for poverty analysis by
the middle of 2006 using the approach endorsed by the
Poverty Advisory Group
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Regional poverty-PPPs expressed relative to a reference
currency in the region
Conduct extensive sensitivity analysis using PPPs derived
using several alternative approaches and identify possible
improvements to the next round


Link regional poverty-PPPs to the US dollar – leading to
PPPs for use with international poverty lines
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Compilation of PPPs
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Compute Basic Heading PPPs for Consumption
items using ICP data collected during 2005.
Aggregate these BH Parities using expenditure
share weights of the “poor”.
“Poor” population for purposes of this work is
taken as the poor according to national estimates
of poverty.
Choose one of the “ring” countries to express
regional poverty-PPPs – this will help linking to
the US dollar.
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Sensitivity Analysis
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As a part of research leading to possible
improvements in the future, a number of
alternative sets of poverty-PPPs will be compiled.
Alternative sets of price data:
 Use prices of only those items considered
representative for poor
 Use “representativeness” information in computing BH
PPPs using CPRD method.
 Construct “poverty-specific” national average prices –
use poverty-mapping data to weight individual price
quotations.
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Sensitivity Analysis
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Examine the effect of choice of index number
methodology – EKS vs. CPD and other methods – on
PPPs.
Democratic weights versus plutocratic weights and their
effect on PPPs.
Expenditure share weights for those around the poverty
line versus weights for the poor (below the poverty line).
Sensitivity to different methods of linking Regional PPPs
to the US dollar.
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