Construction prices in developing countries in ICP 2005 are lower relative to prices in developed countries than in earlier versions of the ICP. Our estimates of the Colombia/U.S. ratio of prices for office buildings demonstrate that the ICP 2005 price ratio for these countries is substantially underestimated. We confirm the validity of our results by comparing construction component prices in these countries. Since the ICP 2005 estimate of the Colombia/U.S. price ratio is representative of its ratio of construction prices between all developing and developed countries, we suspect there is a problem with the ICP 2005 estimation methodology.
