اندازه گیری انحراف جایگزینی در مقایسه بین المللی بر اساس روش های برابری قدرت خرید افزودنی

This paper shows that additive purchasing power parity (PPP) methods, such as Geary–Khamis, are subject to substitution bias. As a result, Geary–Khamis comparisons tend to underestimate per capita income differentials across countries. The magnitude of the bias is measured for a cross-section of 64 countries, using International Comparison Programme (ICP) data. Geary–Khamis overestimates some poorer countries' per capita incomes, relative to richer countries, by as much as 70%. These results have important implications for much empirical work in development and international economics, since Geary–Khamis is the PPP method used by the World Bank, IMF, OECD, ICP and the Penn World Table.