The PWT’s main purpose is to construct panel data for GDP and its components in constant international prices.
National Accounts report GDP and its components in local currency units (LCU).
We could use exchange rates to make these figures into dollars.
The data would then imply that people in low income countries are shockingly poor, not just very poor.
This would be misleading because prices are systematically lower in low income countries.
To compare living standards across countries (and over time), it is necessary to deflate GDP with the local price of a consistent bundle of goods.
The ICP collects data on local prices every several years (benchmark years).
Between benchmark years, prices are interpolated.
Even though there is no theoretically “best” price index, there is a substantial theory of how to construct price indices.
The PWT does this and reports GDP in international prices.
This comes in 2 flavors:
The data can be downloaded here.
I recommend downloading the Stata file and converting into a matlab dataset using Stat/Transfer.
Format of the Stata file:
each row is a country / year combination
countries are identified by their ISO codes. These are 3 letter abbreviations.
each column is a variable (except for the first 4 columns which are country / year info)
Since Mathworks plans to phase out datasets, it would make sense to then convert the whole thing into a Matlab table using dataset2table.
It would now make sense to make each variable into an array indexed by [country, year].
Fortunately, someone has already done this, so you can download the result from the PWT web site.
Unfortunately, that file contains errors (as of 2014-Dec). So you cannot use it!
Since the definitions are hard to find, I copied them from the xls file.
| countrycode | 3-letter ISO country code |
| country | Country name |
| currency_unit | Currency unit |
| year | Year |
| rgdpe | Expenditure-side real GDP at chained PPPs (in mil. 2005US$) |
| rgdpo | Output-side real GDP at chained PPPs (in mil. 2005US$) |
| pop | Population (in millions) |
| emp | Number of persons engaged (in millions) |
| avh | Average annual hours worked by persons engaged |
| hc | Index of human capital per person, based on years of schooling (Barro/Lee, 2012) and returns to education (Psacharopoulos, 1994) |
Output per worker in international prices = RGDPE / EMP.
| cgdpe | Expenditure-side real GDP at current PPPs (in mil. 2005US$) |
| cgdpo | Output-side real GDP at current PPPs (in mil. 2005US$) |
| ck | Capital stock at current PPPs (in mil. 2005US$) |
| ctfp | TFP level at current PPPs (USA=1) |
| rgdpna | Real GDP at constant 2005 national prices (in mil. 2005US$) |
| rkna | Capital stock at constant 2005 national prices (in mil. 2005US$) |
| rtfpna | TFP at constant national prices (2005=1) |
| labsh | Share of labour compensation in GDP at current national prices |
| xr | Exchange rate, national currency/USD (market+estimated) |
| pl_gdpe | Price level of CGDPe (PPP/XR), price level of USA GDPo in 2005=1 |
| pl_gdpo | Price level of CGDPo (PPP/XR), price level of USA GDPo in 2005=1 |
| i_cig | 0/1/2: relative price data for consumption, investment and government is extrapolated (0), benchmark (1) or interpolated (2) |
| i_xm | 0/1/2: relative price data for exports and imports is extrapolated (0), benchmark (1) or interpolated (2) |
| i_xr | 0/1: the exchange rate is market-based (0) or estimated (1) |
| i_outlier | 0/1: the observation on pl_gdpe or pl_gdpo is not an outlier (0) or an outlier (1) |
| cor_exp | Correlation between expenditure shares of the country and the US (benchmark observations only |
| statcap | Statistical capacity indicator (source: World Bank, developing countries only) |
| csh_c | Share of household consumption at current PPPs |
| csh_i | Share of gross capital formation at current PPPs |
| csh_g | Share of government consumption at current PPPs |
| csh_x | Share of merchandise exports at current PPPs |
| csh_m | Share of merchandise imports at current PPPs |
| csh_r | Share of residual trade and GDP statistical discrepancy at current PPPs |
| pl_c | Price level of household consumption, price level of USA GDPo in 2005=1 |
| pl_i | Price level of capital formation, price level of USA GDPo in 2005=1 |
| pl_g | Price level of government consumption, price level of USA GDPo in 2005=1 |
| pl_x | Price level of exports, price level of USA GDPo in 2005=1 |
| pl_m | Price level of imports, price level of USA GDPo in 2005=1 |
| pl_k | Price level of the capital stock, price level of USA in 2005=1 |