Australian statisticians assisting World Bank to conduct unique price collection , Feb 2005

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February 25, 2005
Embargoed: 11:30 AM (AEST)

Australian statisticians assisting World Bank to conduct unique price collection

Statisticians from the Australian Bureau of Statistics (ABS) have been assisting the World Bank to plan the largest and most complex price collection ever undertaken.

The collection was formally launched in Washington DC today.

According to the Australian Statistician, Dennis Trewin, who is Chairman of the Global Executive Board for the International Comparison Program (ICP), the results of the survey will enable Australia to better compare itself with other economies.

Beginning last month, statisticians from more than 100 countries started collecting prices for over a thousand selected products, including various kinds of food, clothing, and housing products. The results will be combined with the Eurostat-OECD Purchasing Power Parity Program, in which Australia has participated for the past 20 years, to enable comparisons of more than 150 countries.

This unique exercise is being undertaken by the ICP with support from the World Bank and cooperation of national statistical offices and regional and international development agencies around the world.

Dennis Trewin said the ABS was pleased to be participating in the global program and to have played a major role in its development.

"This investment in the ICP will provide an excellent resource for Australian businesses which operate abroad," he said.

"The price data collected will be used to calculate the different purchasing power of national currencies.

"In lay terms, the ICP does for all of expenditures what the Big Mac Index does for the hamburger.

"It really is a 'supersized' collection, and with 'the lot'.

"The principle use of the ICP is to compare the relative size of national economies and how they have changed over time and answer some difficult questions in the process. For example, Are per capita incomes of poorer countries improving? Is the number of people living in poverty declining? Is it really more expensive to live in London than other capital cities?

"While some use market exchange rates to try to answer these questions, they
give a distorted picture. This distortion is removed by the ICP."

Mr Trewin said the ICP would be a tremendous resource for all who have an interest in the global economy, including global businesses, economists and development agencies who, for example, might want to compare the relative price levels and national incomes (GDP per capita) of various countries.

"The program presents a rare opportunity for countries to join with the international community to improve the quality of their national data in keeping with the World Bank’s commitment to help build sustainable statistical capacity in developing countries," he said.

Preliminary results from the survey are expected to be available in 2006.