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Prices and Consumption, Economic Statistics
Zdravka Bosanac
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Purchasing Power Parities (PPP)

Price surveys are conducted in order to provide price input data for household consumption, individual government consumption, collective consumption and gross fixed capital formation (investment goods and services). Reference (imputed) PPPs are used for NPISH consumption, inventories, and net exports.

Source data

Price surveys are conducted in order to provide price input data for household consumption, individual government consumption, collective consumption and gross fixed capital formation (investment goods and services). Reference (imputed) PPPs are used for NPISH consumption, inventories, and net exports.

Household consumption For consumer (market) goods and services, special price surveys are carried out. The product sample is determined in collaboration among the participant countries, the OECD and Eurostat. The final product sample should consist of comparable goods and services and, to the largest extent possible, be equally representative of the expenditure patterns of all participant countries. Subsequently, the data collection is carried out by the National Statistical Institutes. Prices are collected from a variety of outlets (markets, corner shops, supermarkets, specialist shops, departmental stores, service establishments, etc.), usually by actually visiting the shops, but also via questionnaires, phone or electronic surveys and Internet. Food and beverages as well as articles for personal hygiene and wellness and beauty products are extensively covered by scanner data from supermarket chains. The use of scanner data / transaction data has increased in PPP in recent years. In 2021, 14 out of 37 participating countries used scanner data for Food, Beverages and Tobacco comparing to only 7 countries in 2018. Denmark has used scanner data for Food, Beverages and Tobacco, as well as for Articles for personal care since 2018. Scanner data has many advantages in comparison with the traditional price collection, as scanner data contains information about all products sold and their turnovers. In addition scanner data includes discounted prices to a much greater extent than traditional price collection. Information on turnover and quantities sold is used for weighting of prices at item level. As a result of the change in the data collection method, there are therefore changes in the price levels for the product groups covered by scanner data compared to previous years.

Prices are collected only in Copenhagen area and its surroundings. In order to obtain national average prices, spatial adjustment factors (SAF) should be provided for all basic headings.

Prices are collected over a period of three years. The product sample is divided into six separate surveys, and each year, two surveys are carried out. In the calculation of PPPs, extrapolations of the most recent survey data are used for the product groups that were not surveyed in the reference year. A temporal adjustment factor at basic heading level, based on HICP data, is used for this purpose. A similar temporal adjustment is needed in order to calculate annual average prices for the whole reference year, based on the prices collected in the survey month.

Rent survey is carried out annually. Figures on rent (housing) are extracted from the national rent survey and from the Central Register of Buildings and Dwellings

Government consumption The services produced by general government are non-market services and as such, they have no economically significant market price. Because there are no market prices, non-market services in national accounts at input prices should be valued for collective services produced by government. The compensation of employees including social contributions for a sample of occupations in collective services provided by the government is surveyed annually. These compensation figures then enter the calculation of PPPs as price estimates for collective services.

In principle, the cost data are national annual averages for each sample occupation, which is extracted from Statistics Denmark's Salaries statistics.

For health services, PPPs are based on a mixture of (quasi-)prices collected for hospital services, outpatient medical services and medical products. This is applied since reference year 2010. The PPPs for years before 2010 are based on the input cost approach. Health survey is conducted annually by Statens Serum Institut.

Gross fixed capital formation National purchasers' prices for investment goods and services should be reported . There are two price surveys, one for equipment goods (once every two years), and one for construction (annual). The prices collected are mid-year prices because it is too costly to monitor prices over the whole year.

Prices for equipment goods are obtained from producers, importers, distributors or actual purchasers. The prices collected can be either purchasers' prices for actual market transactions or purchasers' prices for hypothetical market transactions - that is, what purchasers would pay if they made a purchase. This survey is outsourced to the external expert.

Prices for construction are collected using a set of standard construction projects covering different types of buildings and civil engineering works. Prices for the projects are to be at the level of prevailing tender prices - that is, the prices of tenders that have been accepted by purchasers. This survey is outsourced to the external expert.

Auxiliary data In addition to the prices and adjustment factors enumerated above, expenditure weights at basic heading levels taken from the expenditure breakdown of national accounts are compiled and reported to Eurostat on annual basis.

Frequency of data collection

The data collection is a continuous process. New input data is collected as follows: Household consumption: Six price surveys are carried out over a three years period. 1/3 of the goods and services included in private consumption, are priced each year, and the remaining 2/3 the corresponding consumer prices are extrapolated for the intervening years. Annual survey for rents data. Rent survey is conducted annually. Government consumption: Annual survey of the compensation of public sector employees and annual collection of prices for hospital services. Gross fixed capital formation: Equipment goods survey is carried out every second year, while construction survey is carried out every year. Expenditure weights and auxiliary data: Reported annually.

Data collection

Different methods of data collection are applied for different components of GDP: - Prices for the Household consumption are collected using price collectors, who visit the individual shops, as well as using price lists for major chains and from the Internet. Food and beverages as well as articles for personal hygiene and wellness and beauty products are extensively covered by scanner data from supermarket chains. - Collecting prices for Construction and for Machinery and equipment is outsourced to the external experts. - Figures on rent are compiled from from the data obtained from the national rent survey and the Building and Housing Register (BBR). - The weights used to calculate the aggregated purchasing power parities are available from the national accounts.

Data validation

The validation of input data is an interactive process between Statistics Denmark and Eurostat. Statistics Denmark is responsible for the practical implementation of the surveys under the coordination of countries coordinator. Eurostat makes the final calculations and is mainly responsible for publishing of the results. Globally the work is coordinated by OECD and the IMF within framework of ICP (International Comparison Programme).

Data compilation

The NSs in the participating countries are responsible for data collection, while Eurostat makes the final calculations and is responsible for publishing the results. The calculation of PPPs is undertaken in three stages. The first stage is at the product level, where price relatives are calculated for individual goods and services. The second stage is at the product group (or basic heading) level, where the price relatives calculated for the products in the basic heading are averaged to obtain unweighted PPPs for that particular basic heading, and at the third stage, the basic heading PPPs are weighted and averaged to obtain weighted PPPs for each aggregation level. The weights used to aggregate the PPPs in this last stage are expenditures from each country's National Accounts.

The calculation and aggregation of PPPs requires each participating country to provide 1) a set of national annual prices for the sample of products, and 2) a detailed breakdown of final expenditure on GDP according to a common classification. The calculation of basic heading PPPs is based on binary Fisher type indices for which both a Laspeyres type index and a Paasche type index must first be calculated based on price data. Subsequently, PPPs are calculated for a basic heading using the Èltetö-Köves-Szulc (EKS) method. These PPPs for a basic heading are combined with those of other basic headings to provide weighted PPPs for each level of aggregation up to the level of GDP. The EKS method is applied at this stage as well.

Sometimes, no prices are available for a basic heading and thus no parities can be calculated. In these cases reference parities will be used, i.e. parities initially calculated for a comparable basic heading.


Not applicable.