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## Multilateral approaches to the theory of international comparisons

The present thesis provides a definite answer to the question of how comparisons of

certain aggregate quantities and price levels should be made across two or more geographic

regions. It does so from the viewpoint of both economic theory and the “test” (or

“axiomatic”) approach to index-number theory.

Chapter 1

gives an overview of the problem of multilateral interspatial comparisons and

introduces the rest of the thesis.

Chapter 2 focuses on a particular domain of comparison involving consumer goods and

services, countries and households in developing a theory of international comparisons in

terms of the the (Kontis-type) cost-of-living index. To this end, two new classes of

purchasing power parity measures are set out and the relationship between them is explored.

The first is the many-household analogue of the (single-household) cost-of-living index and,

as such, is rooted in the theory of group cost-of-living indexes. The second Consists of sets

of (nominal) expenditure-share deflators, each corresponding to a system of (real)

consumption shares for a group of countries. Using this framework, a rigorous exact index-

number interpretation for Diewert’s “own-share” system of multilateral quantity indexes is

provided.

Chapter 3 develops a novel multilateral test approach to the problem at hand by

generalizing Eichhorn and Voeller’s bilateral counterpart in a sensible manner. The

equivalence of this approach to an extended version of Diewert’s multilateral test approach is

exploited in an assessment of the relative merits of several alternative multilateral comparison

formulae motivated outside the test-approach framework.

Chapter 4 undertakes an empirical comparison of the formulae examined on theoretical

grounds in Chapter 3

using an appropriate cross-sectional data set constructed by the

Eurostat—OECD Purchasing Power Parity Programme. The principal aim of this comparison is

to ascertain the magnitude of the effect of choosing one formula over another. In aid of this, a

new indicator is proposed which facilitates the measurement of the difference between two sets

of purchasing power parities, each computed using a different multilateral index-number

formula.

Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:BVAU.2429/7180 |

Date | 11 1900 |

Creators | Armstrong, Keir G. |

Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |

Language | English |

Detected Language | English |

Type | Electronic Thesis or Dissertation |

Relation | UBC Retrospective Theses Digitization Project [http://www.library.ubc.ca/archives/retro_theses/] |

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