About CIC

Background

The Center for International Comparisons at the University of Pennsylvania (CICUP) was established within the School of Arts and Sciences in 1990 to continue an intellectual tradition begun at Penn during the 1940s by Simon Kuznets. Kuznets was on the faculty and was further elaborating the system of national accounts that he had helped create. Irving B. Kravis was a student of Kuznets when the work on constant price national accounts was being codified. Kravis moved forward research in the area of spatial national accounts, first with his work for the Organization for European Economic Cooperation (OEEC) with Milton Gilbert. This eventually led to Kravis becoming the Director of the United Nations International Comparison Program in 1968 along with Zoltan Kennessey at the UN. Another Kuznets student, Richard Easterlin, now at the University of Southern California, engaged in a number of historical studies of the regional growth of the U.S. economy. This is also another area of interest to the Center (see Regional Income Estimates). CICUP was established as a center that would include these traditions in addition to other areas of research involving cross-country and inter-area comparisons of incomes and prices.

Center Organization

The present directors of the Center, Alan Heston and Robert Summers took part in the ICP work from its inception in 1968 until about 1985 when the 3rd benchmark comparison, covering 34 countries for 1982, was published. As the ICP became based in the EU, the OECD and the regional Economic and Social Commissions of the United Nations, the research interests of Summers, Kravis and Heston turned to expanding the benchmark comparisons to estimates of GDP on a purchasing power basis for non-benchmark countries for one year. The initial exercise was followed by work by Summers and Heston to extend benchmark and non-benchmark estimates over both time and space to what became Penn World Table. Subsequently Bettina Aten, who had assisted in many of the early computations while a Ph.D. student in Regional Science at Penn, was to take on a larger role in the work, and to pursue her own interests in regional comparisons and spatial analyses based on benchmark and PWT data. Heston and Summers continue as joint Directors of CICUP and Aten has become Research Director of the center in 2002.

CICUP has been provided space and computing support of the Social Science Computing group by the School of Arts and Sciences. CICUP offices are in the McNeil Building with Economics and other Social Science departments. CICUP gratefully acknowledges continuing support of the National Science Foundation for its activities. The World Bank and other organizations have also contributed from time to time to our work. CICUP has primarily been concerned with the expenditure side of GDP while the ICOP center at the University of Groningen has focused on the production side of national accounts in its PPP comparisons. The two centers have been cooperating for a number of years and hope in the future to collaborate on comparisons of prices that help inform both sets of comparisons. Recently the Director of the International Data Center of the University of California at Davis, Robert Feenstra, has been taking on an active role in producing PWT, and will be fully involved in the next round.

Some Activities and Research Interests of CICUP

1. Repository of Benchmark Comparisons. The PWT tables at present only breakdown GDP expenditures into consumption of households, collective consumption of government, domestic investment and the net foreign balance. The benchmark comparisons are much more detailed, including 150 or more expenditure headings for use of researchers. (see About the ICP)

2. Methods of Aggregation. One of the long continuing issues in international comparisons is the method of moving from detailed expenditure headings like cereals to the aggregate of consumption or GDP. While we have long used the Geary method, as modified by Khamis and others, we are also researching methods of spatial linking as well as stochastic methods
of estimation. (see Research Papers)

3. Capital Stock. In PWT we have produced physical capital stock estimates for about 60 countries. We continue to investigate the service life assumptions in our previous work, as well as ways to extend the estimates to more countries.

4. Sub-national Income Estimates. In addition to presenting estimates of regional income estimates converted at national PPPs, Aten has been pursuing methods of adjusting these estimates for price level differences within countries. ( See Research Papers and About Regional Income Estimates)

5. Hedonic Price Estimates. Hedonic estimates have been used for some items like house rents and autos, but most price comparisons have used national average prices, matching identical items as much as possible. Current research at CICUP has looked at the use of hedonic estimates using scanner data and for more common consumption items like foods. These techniques can also examine the question of whether the prices paid by the poor are higher compared to other income groups, another research interest of CICUP. (See Research Papers)

6. Relative Price Differences by Expenditure Aggregates. Relative price differences between services and commodities and tradables and non-tradables have been a continuing interest at CICUP. (See Research Papers)

7. The World Distribution of Income. (see Research Papers)

8. Applications of PPPs to Historic GDP Estimates. Alternative ways to estimate historic PPPs include extrapolation by national growth rates versus estimates based on current PPPs, albeit quite crude, applied to current PPP estimates. (See Research Papers)