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Getting to know Penn World Data

Getting prepared

Before you start using Penn World Data, we recommend you print out the Description of variables page as you will find it useful to have a hard copy of the list of variables to hand while you work. This page itemises the codes by which each variable is described in the data tables. You need these codes so you can keep track of which variable is which when the data tables appear on your screen. Now go to the Penn Data request form. You are ready to access the tables.

Use the following tasks to get acquainted with the data available. Each task assumes that you have learnt the skills needed in the previous task. You could take a long time over some of them and consider the questions carefully, or you could go through them quickly just to get familiar with the possibilities.

Task 1

What percentage of the world's population lives in each of the following countries? China, India, USA, Indonesia, Brazil, Japan, UK. (The total world population is approximately 6 billion).

STEP 1... How do you want your data?

First, you want to look at the data in an easy to read form. So click on the HTML button. Later you can download the data if you want to, but you will need to have a suitable spreadsheet file ready to load the data into.

STEP 2... What years do you want to know about?

Select the first and last years for which you want data. Hint: don't request a longer series than you really need. It will just take longer to load. For the purpose of this task you might think 1988 to 1992 will be enough.

STEP 3... Which countries to request data for?

When you select the second country, do so by holding down CTRL while you click on it. Do the same for the rest of the countries.

STEP 4... Now select which variables you want to see

Select 'Population'.

You are now in a position to answer the question. Probably the simplest way of doing it is to use a calculator. Can you rank these countries according to which have the fastest growing populations? Explain how you arrived at your ranking.

Task 2: Comparing GDP

If you worked your way through Task 1, you are now familiar with the procedure for requesting data. Click on 'Back' to get back to Step 1.

1. Select five years: 1988 - 1992.
2. Select five countries. Include at least one European country, one Asian country and one African country.
3. Select the variable 'Real GDP per capita (Constant Prices: Laspeyres)'. (Remember to de-select any variables which still have a 'tick' left over from the previous task).
4. Fetch the data.
5. Rank the five countries according to their per capita incomes.
6. Think about how fast these countries per capita incomes are growing. What conclusions can you draw? Have the countries with the lower per capita incomes grown faster or more slowly than the richer ones?

Task 3: Testing a hypothesis

When we have a good idea of a likely relationship between two variables, we can select a hypothesis and test it. You may be able to think of a number of hypotheses linking two variables which you can test using the Penn World Tables.

To start off, try testing the following hypothesis:

The level of real income is directly related to the level of investment.

1. Select ten years, 1983 - 1992.
2. Select three countries, one European, one African and Japan. (Alternatively, compare the USA, the UK and Japan, or a Latin American country with Singapore or Taiwan).
3. Select 'Real GDP per capita (Constant Prices: Laspeyres)' and 'Investment Share of RGDPL'.
4. Fetch data.
5. What conclusions can you draw? Does the evidence tend to support the hypothesis? What other information might you need in order to draw an informed conclusion?

Task 4: Thinking about open economies

Some economies are more open than others: that is, more of their economic activity involves international trade. Luxembourg is a very open economy. It is closely integrated with its neighbours, Belgium, France and Germany. The USA is not a very open economy, although it is more so than it used to be. It is capable of producing a huge range of products competitively, and being a large economy, it is much more self-sufficient than Luxembourg.

1. Look at the data for the USA and Luxembourg on Openness (11).
2. Now add the data for the UK. How open is the UK economy?
3. Add the data for Taiwan and Switzerland and two other countries. What might cause an economy to be more rather than less open?

Hint: you may want to compare countries' total GDP. You cannot do this with the data available which is all either in per capita or in index number form. You would need to go to other sources, unless you are prepared to multiply per capita GDP by the population figure!

Task 5: Changing terms of trade

Some countries have problems because changes in the prices of goods they export bring about big changes in their income from exports. This is particularly true for developing countries that rely on one or two products for their export earnings. A fall in the world price of copper means deteriorating terms of trade for Zambia, which has large copper mines. Another country that relies heavily on exports of primary products with fluctuating prices is Jamaica.

You can explore the impact of changes in the terms of trade on per capita income by looking at 'Real Gross Domestic Income (RGDPL adjusted for Terms of Trade changes)' (variable 19). Select Jamaica, Zambia and perhaps the UK or one or two other countries for comparison.