Definition: Quantity similarity index
Purchasing power parities
The similarity of the structure of quantities between any pair of countries is measured by the correlation coefficient that is obtained by regressing the internal quantity structure of one country against the corresponding internal quantity structure of the other country. Internal quantity structures can be expressed as a vector of the ratios of product quantities to the quantity of a reference product. In practice, the correlation coefficient is obtained by regressing the basic heading real expenditures. The basic heading real expenditures are interpreted as notional quantities (2012 Methodological manual on purchasing power parities).
The similarity of the structure of quantities between any pair of countries is measured by the correlation coefficient that is obtained by regressing the internal quantity structure of one country against the corresponding internal quantity structure of the other country. Internal quantity structures can be expressed as a vector of the ratios of product quantities to the quantity of a reference product. In practice, the correlation coefficient is obtained by regressing the basic heading volumes (real final expenditures) of the first country against the corresponding basic heading volumes (real final expenditures) of the second country. The basic heading volumes (real final expenditures) are interpreted as notional quantities (2005 Methodological manual on purchasing power parities).
Source:
Eurostat, Organization for Economic Cooperation and Development (OECD), "Eurostat-OECD Methodological Manual on Purchasing Power Parities", Publications Office of the European Union, Luxembourg, 2012
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