The "XR-ratio tables"

valid_XRratio() in OECDsppps calculates the exchange rate ratio (XR-ratio), which is a region-country's XR-price Variability can be compared to highlight products in countries/regions that are most variable (high XR-ratio) across countries; see World Bank (2013), ICP (2021) and European Union/OECD et al. (2024) .

Usage

valid_XRratio(
  data,
  average_price = "Average price of product",
  exchange_rate = "XR USD"
)

Arguments

data

A data frame or tibble containing at least a column with the average country-region prices and exchange rate.

average_price

Average country-region prices of the individual item-level price quotes. Correspond to the "Average price of product" obtained in valid_apt().

exchange_rate

National-level exchange rate for common currency; typically USD.

Details

The XR-ratio uses the exchange-rate-converted prices to calculate the standardised price ratio (SPR) For product \(1\) and country–region \(A\), the SPR is defined as: \[SPR_{1A} = \mu^*_{1A} / \left( \prod_{n = A,\dots, N} \mu^*_{1n} \right)^{\frac{1}{N}} \times 100\] where \(\mu^{*}_{1A}\) represents the average converted price of product \(1\) in country–region \(A\), and \(N\) is the total number of country–regions.

References

European Union/OECD, Hearne D, Bailey D (2024). Eurostat-OECD Methodological Manual on Purchasing Power Parities (2023 Edition), volume 12(1). OECD Publishing, Paris. doi:10.2785/384854 , https://doi.org/10.1080/21681376.2025.2475115.

ICP (2021). “A Guide to the Compilation of Subnational Purchasing Power Parities (PPPs).” International Comparison Program. https://thedocs.worldbank.org/en/doc/5064f2288436664bc8f9811c8a5b8c55-0050022021/original/Guide-Subnational-PPPs.pdf.

World Bank (2013). Measuring the Real Size of the World Economy: The Framework, Methodology, and Results of the International Comparison Program — ICP. World Bank. doi:10.1596/978-0-8213-9728-2 .