Definition: Quantity similarity index

Category: 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). http://ec.europa.eu/eurostat/product?code=KS-RA-12-023&mode=view Eurostat and Organization for Economic Cooperation and Development (OECD), "Eurostat - OECD Methodological manual on purchasing power parities (2005 Edition)", Methods and Nomenclatures, Office for Official Publications of the European Communities, Luxembourg, 2006European Union, Regulation (EC) No 1445/2007 establishing rules for the provision of basic information on PPPs, Official Journal of the European Union No L 336, 20.12.2007, p. 1 - 24