Comparison of prices and levels of gross domestic expenditure between Austria and Poland (APC),1975 and 1978

Abstract

There is a rather long tradition of bilateral comparisons between Austria and Poland, conducted under the auspices of ECE (1964, 1973, 1975, 1978). Within these series of studies the comparison of prices of gross domestic expenditure (GDE) 1975 and 1978 stands out for two main reasons;

(1) the comparison 1975 with a view to the parallel ICP, Phase III (1975), which enables some appreciation to be made of the efficiency of the multilateral ICP-concepts as compared with a corresponding bilateral study; and

(2) the comparison 1978 with a view to the updating methodology used for deriving 1978 price ratios from the 1975 data basis by means of appropriate price indices.

In general, bilateral comparisons permit the identification of more numerous and more characteristic items for price comparisons. They also establish a most comparable expenditure classification. Differences in the socio-economic systems require specific solutions in particular in non-market services (housing; health; education). To overcome these differences a twofold concept has been derived of ‘real price indices’ reflecting actual transactions, and of ‘technical price indices’, reflecting imputed and non-market transactions. While the latter indices have been used for the derivation of the overall level figures, real price indices seem to be more appropriate for the comparison of price relations (purchasing power parities).

According to the comparison, the level of GDE in Poland has been 61% of Austria in 1978, on the average, but for consumption by the population it has reached only 50%. The analogous PPP (Zloty/Schilling) has been 1.02 for GDE, and 1.05 for consumption by the population (technical index). The real index for private consumption has been 1.14, however.