Purchasing-Power Parities and Exchange Rates in Latin America

1988 ◽  
Vol 36 (3) ◽  
pp. 529-541 ◽  
Author(s):  
Christopher K. Clague
Keyword(s):  
Latin America ◽  
Exchange Rates ◽  
Purchasing Power ◽  
Purchasing Power Parities

scholarly journals A Refined Basket of Goods Approach for Comparing Construction Costs between Countries

2012 ◽  
Vol 9 (2) ◽  
pp. 29-38 ◽  
Author(s):  
Rick Best
Keyword(s):  
Exchange Rates ◽  
Construction Industry ◽  
International Comparison ◽  
Purchasing Power ◽  
Simple Construction ◽  
Construction Costs ◽  
Single Base ◽  
Industry Performance ◽  
The Cost ◽  
Purchasing Power Parities

Most comparisons of construction industry performance requirethat construction costs be converted to a common base. Existingmechanisms for such conversions produce unreliable results.A proposed method for producing industry-specifi c conversionfactors was tested using a single building type. A basket ofmaterials and labour was identifi ed and weighted to refl ect the costshare of each item in a completed project. Prices for the basketwere gathered in three cities and simple construction specifi cconversion indices were calculated based on the constructionpurchasing power of each currency. The construction purchasingpower parities (CPPPs) showed marked differences from otheravailable conversion mechanisms such as exchange rates andgeneral purchasing power parities (PPPs) that have been used inprevious international comparison studies. While the study waslimited in scope, and is only the fi rst stage of a longer process, thesubstantial differences in comparative costs based on purchasingpower illustrate the problems inherent in international costcomparisons. For example, comparing Singapore and Sydney,Singapore costs appear to be only 40% of those in Sydney (basedon exchange rates) about two-thirds the cost of Sydney (usinggeneral PPPs) or almost the same (using the preliminary CPPPs).These results illustrate the problems of converting costs fromlocal currencies to a single base currency and suggest that furtherdevelopment is needed to improve the reliability of outcomes.

scholarly journals International comparisons of cost and productivity in construction: a bad example

2012 ◽  
Vol 12 (3) ◽  
pp. 82-88 ◽  
Author(s):  
Rick Best
Keyword(s):  
Exchange Rates ◽  
International Comparisons ◽  
Careful Analysis ◽  
Data Sources ◽  
Purchasing Power ◽  
Infrastructure Projects ◽  
Construction Costs ◽  
International Construction ◽  
The Us ◽  
Purchasing Power Parities

In a report published in June 2012 the Business Council of Australia (BCA) reported that it costs considerably more to build a variety of types of infrastructure in Australia than it does in the US. Airports (90% more costly) and hospitals (62%) were quoted as the worst cases with other projects ranging from 26% to 43% more. They used these figures to conclude that Australia is a high cost, low productivity environment for building infrastructure projects. These claims were based on cost/m2 figures published by a major international construction consultancy. The method used by the BCA is flawed in two ways: one is the in the use of costs that are recognised as giving only the broadest of indications of probable costs and the second is the use of exchange rates to convert Australian construction costs to US dollars. Careful analysis of the methodology used, supported by a series of other comparisons based on other data sources and other conversion factors (purchasing power parities or PPPs), suggests that in real terms it probably costs no more to build in Australia than it does in the US and that it may well be cheaper to build in Australia than it is in the US.

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