Definition: Gini-Èltetö-Köves-Szulc method

Category: Purchasing power parities

The EKS method is named after the three individuals who independently advocated its use in the mid-1960s. The formula, however, was actually proposed by Gini some thirty years earlier in a paper on circularity and in recent literature the method is called the GEKS. The EKS (Eltetö-Köves-Szulc method) or GEKS method as originally proposed did not take into account the representativity of the products priced when calculating PPPs (Purchasing power parities) at the basic heading level. This refinement was introduced later by Eurostat in its 1980 comparison. As a consequence, there are two versions of the method: the classic version without representativity and the Eurostat-OECD version with representativity. In current literature, the classic version is referred to as EKS or GEKS and the Eurostat-OECD version as EKS* or GEKS*. (An asterisk is the representativity indicator used by Eurostat and the OECD. In debate it is pronounced "star". Hence "EKS star" or "GEKS star".)

Eurostat and the OECD have always referred to EKS* or GEKS* as EKS. EKS is used in the PPP Regulation. It is also used throughout the reports and papers that Eurostat and the OECD have prepared relating
 



to their joint PPP Programme. To preserve clarity and continuity, Eurostat and the OECD have not adopted the new terminology and continue to employ EKS instead of EKS* or GKS* when discussing the calculation of PPPs at the basic heading level.

Note that EKS can also refer to the aggregation of basic heading PPPs. http://ec.europa.eu/eurostat/product?code=KS-RA-12-023&mode=view