Journal of Economic and Social Measurement - Volume 30, issue 1

Authors: Durand, René

Article Type: Research Article

Abstract: We show in this brief note that Rymes' [9-11] static index of multifactor productivity growth in which capital goods are considered as endogenous produced inputs may equivalently be expressed in a dynamic growth accounting framework that is fully consistent with …modern growth theory, both of the exogenous (Solow [13]) or endogenous [3] variety Show more

DOI: 10.3233/JEM-2005-0240

Citation: Journal of Economic and Social Measurement, vol. 30, no. 1, pp. 1-8, 2005

Authors: Stokes, Houston H.

Article Type: Research Article

Abstract: This paper is concerned with a detailed study of the accuracy tradeoffs of differences in data precision and alternative approaches to the estimation of OLS models. The implications of the analysis of a variety of problems, most of which have …known answers, extend far beyond OLS modeling and directly impact any empirical analysis when the matrices are at all ill conditioned or "stiff". While the focus here is on linear modeling, the findings are equally, if not more, important to nonlinear modeling. Independent of the effect of the algorithm used, the precision in which the data was initially read was found to have a major impact on accuracy, even when the data was subsequently moved to a higher precision. This finding, illustrated best with the extremely multicollinear Filippelli data set, suggests that if a data base standard is agreed upon, the precision of the data saved will be of critical importance. By the use of variable precision arithmetic software, an extended benchmark was developed for the Filippelli data and the results compared to the real*8 and real*16 QR results. Much of the software developed for this paper has been put in the public domain to be used by other researchers. Show more

DOI: 10.3233/JEM-2005-0242

Citation: Journal of Economic and Social Measurement, vol. 30, no. 1, pp. 9-38, 2005

Authors: Bradley, Ralph

Article Type: Research Article

Abstract: In many well known studies, unit values are often used in place of observed prices when constructing price indexes or modeling demand systems. This study shows that one cannot get consistent estimates by replacing prices with their unit values. When …computing price indexes, the use of unit values or unit value indexes will misspecify substitution effects and mismeasure the true price. The use of unit values as a price regressor in an aggregate demand model will misspecify the model even though the functional form of the demand model is correct. I then present empirical investigations using cereal sales data to evaluate a well known paper that estimated the welfare gain of a new cereal brand. I show that the use of unit values in this study biases the estimate of the welfare gain of the new brand. JEL Codes: C43, C51. Keywords: Unit value, cost of living index, aggregation consistency. Show more

DOI: 10.3233/JEM-2005-0243

Citation: Journal of Economic and Social Measurement, vol. 30, no. 1, pp. 39-61, 2005

Authors: Becker, Randy A. | Shadbegian, Ronald J.

Article Type: Research Article

Abstract: Since 1973, the Pollution Abatement Costs and Expenditures (PACE) survey has been the principle source of information on US industries' capital expenditure and operating costs associated with pollution abatement efforts. The PACE survey was discontinued after 1994 and then revived …and substantially revised in 1999, making longitudinal analysis quite difficult. Conceptual differences include matters as fundamental as the scope and meaning of pollution abatement as well as the definition of operating costs. Other critical changes include industrial coverage and sample selection. This paper is the first to comprehensively document the many changes in the PACE survey across these years and to provide detailed guidance to researchers and policymakers wishing to compare the 1994 and 1999 data. Overall, we find environmental spending by the manufacturing sector declined 27% between these years, with significant heterogeneity across industries. We discuss potential reasons for this dramatic decline, focusing mainly on survey methodology and design. Show more

Keywords: Pollution abatement, survey data, environmental costs, manufacturing

DOI: 10.3233/JEM-2005-0249

Citation: Journal of Economic and Social Measurement, vol. 30, no. 1, pp. 63-95, 2005