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Constructing Bounds on Per Capita Income Differentials across Countries

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  • Robert J. Hill

Abstract

The results of purchasing power parity (PPP)‐based comparisons of income across countries can be quite sensitive to the choice of index number formula. Tighter bounds on per capita income differentials can be constructed either by assuming homothetic preferences, or by estimating a demand system. Both approaches are used to construct bounds on per capita income differentials across the OECD countries. The paper concludes by discussing the strengths and weaknesses of each approach. JEL Classification C43; F31; O47

Suggested Citation

  • Robert J. Hill, 2000. "Constructing Bounds on Per Capita Income Differentials across Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 285-302, June.
    • Handle: RePEc:bla:scandj:v:102:y:2000:i:2:p:285-302
    DOI: 10.1111/1467-9442.00200
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    Cited by:

    1. Kuan Xu & Zhengxi Lin, 2007. "Participation in Employer-sponsored Training in Canada: Role of Firm Characteristics and Worker Attributes," Working Papers daleconwp2007-02, Dalhousie University, Department of Economics.
    2. Toshinobu Matsuda, 2005. "Differential Demand Systems: A Further Look at Barten's Synthesis," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 607-619, January.

    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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