What impact does the choice of formula have on international comparisons?
Canadian Journal of Economics , Volume 34 - Issue 3 p. 697- 718
In this paper an empirical comparison of a number of alternative multilateral indexnumber formulae is undertaken. The magnitude of the effect of choosing one formula over another is ascertained using an appropriate cross-sectional data set constructed under the auspices of the Eurostat-OECD Purchasing Power Parity Programme. To this end, a new indicator is proposed that facilitates the measurement of the difference between two sets of bloc consumption shares, each computed using a different multilateral comparison method.