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PPPs for technology products with country brand model dummy (CBMD) method : fourth regional coordinators meeting (April 20-21, 2011) (Inglês)

Technology products such as audio-video equipment, office and communication equipment present special challenges for price collection and purchasing power parity (PPP) computation. Primarily this is related to short life cycles and fast changing nature of these products, as well as rapid technological progress occurring in the underlying technologies. Particular models of digital versatile disc (DVD) players or television's (TVs), for example, may become obsolete and get replaced in the course of one year. Price of these products often drops 30 percent or more during one year. To complicate the situation, introduction of new models may not be simultaneous across different markets. In general, regular international comparison program (ICP) procedures cannot capture these properties and cannot produce satisfactory PPPs. In addition, consumer electronics companies often tend to create market fragmentation, introducing models with minor variations for groups of countries or even for individual countries. The procedure discussed in this note intends to address these issues.




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