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# Comparison with ICP III Results

It is not possible to make a direct or detailed confrontation of our results with those of ICP. This is partly because its expenditure approach breaks down economic activity in a different way from our value added approach as demonstrated in the input-output table 1.1 in our chapter I. There is atlso the problem that the ICP national price data for consuimption items are confidential and could not be consulted at the UN Headquarters, or retrieved from the archives when we visited Brazil and Mexico. UNSO was able to let us have a copy of their own estimates of prices for capital goods, which enabled us to make some rather partial cross-checks.

One can, however, get a rough idea of the ICP results for manufacturing by grouping the PPPs for the 82 ICP items with a manufacturing content, using a similar technique to researchers who have mined the ICP results as proxies for the kind of study we have made (see table 1.2). The confrontation of our results with the ICP can be seen in table 3.17. Whilst our estimate of the ICP result for manufacturing is rather crude and is not presented in this way in the ICP itself, nevertheless it is an acceptable and indeed the only way of comparing the two sets of results. In the case of Brazil our results and those of ICP are strikingly similar. In the case of Mexico, the results differ substantially.

It should be recalled that one of our original reasons for including Mexico in the pilot study was that there was the same type of discrepancy between the results of an earlier industry-of-origin study and ICP III (see Maddison 1970, and 1983), and it also seemed most unlikely that Mexico would be in such a favourable PPP position after 22 years of a fixed rate for the dollar and on the eve of a major devaluation.

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|Comparison<br>of Our<br>and the Aux<br>-------------------------------------------------------|Weighted<br>mented Bin<br>with a|TABLE<br>Average<br>aries<br>of<br>Manufactu|3.17<br>PPPs for<br>the ICP<br>ring<br>Co|Manufacturi<br>Expenditure<br>ntent<br>__-----|ng<br>as a<br> <br>Items<br>---------------|Whole|
|---|---|---|---|---|---|---|
||Br<br>US<br>Quantity<br>Weights|azil/USA<br>Brazil<br>Quantit<br>Weight|<br>Geometri<br>y Average<br>s|Me<br>c US<br>Quantity<br>Weights|xico/USA<br>Mexican<br>Quantity<br>Weights|Geometric<br>Average<br>|
|Sample PPP|9.10|6.58|7.74|14.81|11.77|13.20|
|Reweighted PPP<br>(by major branch)|8.79|6.26|7.42|14.92|10.94|12.77|
|ICP III Augmented PPP|8.93|6.17|7.42|12.58|9.o4|10.66|

Note: All our PPPs are adjusted for quality differences in passenger cars.

Source: Top line from table 3.13. Second line derived from tables 3.15 and 3.16 for Brazil/USA and Mexico/USA respectively. Third line derived from Kravis, Heston and Summers (1982) p. 255 and 272, as follows: the ICP III augmented binary PPPs for expenditure on the consumer items food, beverages, tobacco, clothing, footwear, furniture, appliances and transport equipment, and for producers durables were used to make the weighted average. These are the ICP PPPs which are conceptually closest to our type of comparison. The preferred PPPs of the ICP itself are in "international dollars".