Definition: Productivity adjustment

Category: Purchasing power parities

An adjustment made to the prices paid by non-market producers for labour, capital and intermediate inputs so that they correspond to a common level of multi-factor productivity. In practice, an adjustment made to the prices (compensation of employees) paid by non-market producers for labour so that they represent the same level of labour productivity. Productivity adjustments are not made in Eurostat-OECD comparisons. http://ec.europa.eu/eurostat/product?code=KS-RA-12-023&mode=view Eurostat and Organization for Economic Cooperation and Development (OECD), "Eurostat - OECD Methodological manual on purchasing power parities (2005 Edition)", Methods and Nomenclatures, Office for Official Publications of the European Communities, Luxembourg, 2006European Union, Regulation (EC) No 1445/2007 establishing rules for the provision of basic information on PPPs, Official Journal of the European Union No L 336, 20.12.2007, p. 1 - 24