This paper addresses the following question: can satisfactory residential property price indexes be constructed using hedonic regression techniques where location effects are modeled using local ...neighborhood dummy variables or is it necessary to use spatial coordinates to model location effects. Hill and Scholz (2018) addressed this question and found, using their hedonic regression model, that it was not necessary to use spatial coordinates to obtain satisfactory property price indexes for Sydney. However, their hedonic regression model did not estimate separate land and structure price indexes for residential properties. To construct national balance sheet estimates, it is necessary to have separate land and structure price indexes. The present paper addresses the Hill and Scholz question in the context of providing satisfactory residential land price indexes. The spatial coordinate model used in the present paper is a modification of Colwell’s (1998) spatial interpolation method. The modification can be viewed as a general nonparametric method for estimating a function of two variables.
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BFBNIB, FZAB, GIS, IJS, IZUM, KILJ, NLZOH, NUK, OILJ, PILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
Millions of goods and services are now unavailable in many countries due to the current coronavirus pandemic, dramatically impacting on the construction of key economic statistics used for informing ...policy. This situation is unprecedented; hence, methods to address it have not previously been developed. Current advice to national statistical offices from the International Monetary Fund, Eurostat and the United Nations is shown to result in downward bias in the consumer price index (CPI) and upward bias in real consumption. We conclude that, to produce a meaningful CPI within the lockdown period, it is necessary to establish a continuous consumer expenditure survey.
Résumé
Mesure de la consommation réelle et des biais par défaut de l’indice des prix à la consommation en période de confinement. En raison de la pandémie actuelle de COVID‐19, des millions de biens et de services sont présentement indisponibles dans de nombreux pays, entravant significativement l’élaboration de statistiques économiques clés visant à éclairer les politiques. Cette situation est sans précédent, et aucune méthode n'a encore été développée pour y remédier. Les avis dispensés aux organismes nationaux de statistiques par le Fonds monétaire international, Eurostat et les Nations Unies se traduisent par des biais systématiques par défaut quant à l'indice des prix à la consommation (IPC), et par des biais par excès quant à la consommation réelle. Notre conclusion est que pour produire un IPC significatif lors d'un confinement, il est nécessaire de procéder à une enquête continue sur les dépenses de consommation.
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BFBNIB, FZAB, GIS, IJS, IZUM, KILJ, NLZOH, NUK, OILJ, PILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
The use of multilateral indexes is increasingly an accepted approach for incorporating scanner data in a consumer price index. The attractiveness stems from the ability to be able to control for ...chain drift bias. Consensus on two key issues has yet to be achieved: (i) the best multilateral method to use, and (ii) the best way of extending the resulting series when new observations become available. We present theoretical and simulation evidence on the extent of substitution biases in alternative methods. Our results suggest the use of the Caves-Christensen-Diewert-Inklaar index with a new method, the "mean splice," for updating.
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•General theoretical framework for decomposing productivity growth is provided.•Uses nonparametric reference technologies without convexity assumptions.•Technical efficiency, technical change and ...returns to scale measures are defined.•Justification given for the geometric mean form of the Bjurek productivity index.
Productivity measures are increasingly regarded as key indicators of economic performance. Identifying sources of productivity growth is of interest to both firms and policy makers. This paper revisits the debate on how to decompose productivity growth into explanatory factors, with a focus on extracting technical progress, technical efficiency change, and returns to scale components. Using Bjurek's concept of the Malmquist index, introduced into production theory in a systematic way by Caves, Christensen and Diewert, a reference technology is required to define the components of interest. Unlike other approaches, ours do not make any convexity assumptions on the reference technology but instead follows the example of Tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions. A new decomposition of a productivity index is provided, with the existence and properties of the underlying distance functions of the decomposition proven under relatively unrestrictive assumptions. The paper also provides for the first time a theoretical justification for the geometric average form of the Bjurek productivity index. These rigorous theoretical contributions provide significant avenues for enhanced understanding of empirical productivity performance.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK, ZRSKP
Brynjolfsson et al. (2019a) have used experimental economics to measure the welfare benefits of free commodities and to define an extended measure of output, GDP‐B. In this paper, their ...methodological approach is generalized to measuring the benefits of new commodities which may or may not be free. Their approach leads to a new method for estimating Hicksian reservation prices. The new methodology in the present paper requires experimental estimates for household willingness to pay for new commodities or estimates for the compensation required for households to give up their use of a new commodity.
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BFBNIB, FZAB, GIS, IJS, IZUM, KILJ, NLZOH, NUK, OILJ, PILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
This paper introduces a new method for simultaneously comparing industry productivity across countries and over time. The new method is similar to the method for making multilateral comparisons of ...Caves, Christensen and Diewert (1982b) but their method can only compare gross outputs across production units and not compare real value added of production units across time and space. The present paper uses the translog GDP methodology for measuring productivity levels across time that was pioneered by Diewert and Morrison (1986) and adapts it to the multilateral context. The new method is illustrated using an industry level data set and shows that productivity dispersion across 38 countries between 1995 and 2011 has decreased faster in the traded sector than in the non-traded sector. In both sectors, there is little evidence of decreasing distance to the productivity frontier.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
We examine the impact of time aggregation on price change estimates for 19 supermarket item categories using scanner data. Time aggregation choices lead to a difference in price change estimates for ...chained indexes which ranged from 0.28% to 29.73% for a superlative index and an incredible 14.88%–46,463.71% for a non-superlative index. Traditional index number theory appears to break down with weekly data, even for superlative indexes. Monthly and (in some cases) quarterly time aggregation were insufficient to eliminate downward drift in superlative indexes. To eliminate drift, a novel adaptation of a multilateral index number method is proposed.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
Standard theory for cross‐country productivity comparisons assumes all countries use the same factor inputs in production. This assumption is violated when including natural resources, such as oil, ...gas and gold, because countries do not extract the full set of resources. In this paper we propose a solution by viewing it as a “missing goods” problem and assigning missing inputs a reservation price equal to the world resource price. We show that this has a substantial impact on relative productivity levels for countries heavily reliant on natural resources for generating their income. Under our new productivity measure, resource‐rich countries are no longer uncommonly productive.
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A problem with index number methods for computing TFP growth is that during recessions these methods show declines in TFP. This is rather implausible since it implies technological regress. We ...develop a new method to decompose TFP growth into technical progress and inefficiency arising from the short run fixity of capital and labour, and apply this to new data on the US corporate nonfinancial sector and the noncorporate nonfinancial sector. The analysis sheds light on sources of the productivity growth slowdowns over the period 1960–2014.
Feenstra and Weinstein introduced a special case of the translog cost function, the Symmetric Translog (ST) Cost Function, which replaced all of the second order parameters which are present in the ...Translog functional form by a single positive parameter. The ST functional form is useful in the context of estimating consumer preferences over related products and provides an alternative to the use of Constant Elasticity of Substitution (CES) preferences in this context. The ST functional form has a potential advantage over the CES functional form that it produces finite estimates for reservation prices for missing products whereas the CES reservation prices are always infinite. The present paper proposes a Generalized Symmetric Translog Cost Function which also generates finite reservation prices but is more flexible than the ST functional form.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
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