This example looks at two measures of the size of a national economy, GDP (Gross Domestic Product) and GDP per head. It will show how different values for the variables are observed if different means of conversion to a common currency are used. In particularly the difference between using Purchasing Power Parity (PPP) conversion rates and more conventional exchange rates will be highlighted. It suggests that even such an apparently simple comparison as ranking economies by size can be misleading if the correct series is not used.

Various series for GDP are easily obtained from many data-banks on the ESDS International site, but a comprehensive, largely consistent and comparable set comes from World Bank International Development Indicators.

1. Go to the World Bank data set and choose 'World Development Indicators'. You will get the following list.
   Fig: World Bank - World Development Indicators rates
2. Put the series into the column dimension, countries into the row dimension and date into the 'other' dimension. If the series list does not show in the main window, click 'Series'.
3. On the list tick the following GDP measures:

   GDP (current prices US$)	GDP, PPP (current international $)
   GDP (constant 2000 US$)	GDP, PPP (constant 2000 international $)
   	GDP per capita, PPP (current international $)
   GDP per capita (constant 2000 US$)	GDP per capita, PPP (constant 2000 international $)

   (Note you could do a similar exercise with Gross National Income - GNI (the new gross national product) - by scrolling a little further down the series list).

4. Using 'Country/Group', select all individual countries (select everything on the list then deselect the aggregate groups such as 'World' or 'High Income: OECD')
5. Select the year '2000' in the 'Year' list. Choosing the year 2000 simplifies the exercise as this is the base year for constant price series, but it may be more interesting to choose another year. (Try this exercise choosing another year).

   Note that GDP per capita (current US$) is missing.

6. Click the 'View as Table' icon and you should obtain the following table:
   Fig: World Bank - World Development Indicators table view

   The report has constructed lists of gdp measures for all countries in alphabetical order of their names.

7. To make this into a league table, choose a particular series and click the 'down arrow' in the series name cell. The table now gives you the series by size of GDP as measured by the chosen series. For example: Choose GDP (constant 2000 US$) and click its down arrow.
   Fig: World Bank - World Development Indicators GDP (constant 2000 US$)

   In this table the USA is at the top. However note the position of China and India, someway down the league.

8. Now choose the series GDP PPP (constant international $) and click its 'down arrow'
   Fig: World Bank - World Development Indicators GDP PPP (constant international $)

   This gives different positions altogether. USA remains top but now China and India are second and fourth respectively. Quite a change!

Downloading the chosen datasets to a spreadsheet might be a good idea. The spreadsheet will look something like the following:

To download this file to your PC right click on the link below and select the Save Link As ... or Save Target As ... option.

• Download Spreadsheet [Excel 964 KB]