Journal of Economic and Social Measurement - Volume 35, issue 1-2

Authors: Bitros, George C.

Article Type: Research Article

Abstract: This paper surveys and assesses the empirical literature that bears on the applicability of the theorem of proportionality, which asserts that depreciation is proportional to the outstanding capital stock. All available evidence shows that: a) the rates of depreciation and …retirements vary from year to year in response to changes in conventional economic forces like utilization, maintenance and repair, the prices of new capital goods, etc., and b) while the approximation of the distribution of depreciation rates by a single parameter may be characterized by simplicity and ease of use, at the same time it thwarts the advances that can be achieved by returning to a general equilibrium model centered on the time structure of capital and the useful lives of its components. For this reason, it is concluded that, the sooner this theorem is replaced by an endogenous theory of depreciation and replacement, the better for economic theory and policy. Show more

Keywords: Capital longevity, replacement, depreciation, scrappage, maintenance, utilization, obsolescence

DOI: 10.3233/JEM-2010-0327

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 1-31, 2010

Authors: Phillips, Keith R. | Daly, Christina

Article Type: Research Article

Abstract: The broadest and most commonly used measure of the cost of living across U.S. cities is the American Chamber of Commerce Research Association (ACCRA) index. This index is used by business and government organizations and the media to rank living …standards and real wages across U.S. cities. In this study we reduce the aggregation bias in the index by calculating national average prices for the 59 item prices using population weights instead of the equal weight formula used by ACCRA. This correction results in a decline in the index values for all cities and changes in the rankings and bi-variate comparisons between city pairs. In some high-cost cities the index values decrease by over 25 percent, and in 74 percent of the cities the rank changes by greater than one spot. Show more

Keywords: Cost of living index, population weighting, regional data

DOI: 10.3233/JEM-2010-0328

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 33-42, 2010

Authors: Kämpke, Thomas

Article Type: Research Article

Abstract: The mean value and the median are analyzed as alternative measures for both income average and poverty lines. Inequality and poverty being related, yet separate, issues requires separate arguments in both cases. Relative poverty lines that are proportional to either …the mean or the median income are compared by statistical properties and in the light of poverty axioms. In particular, the mean turns out to be favourable when relative poverty lines are extended by considering each income as the smallest of all larger incomes. Such truncations which lend to the concept of self-similarity are formally introduced. They induce the same class of income distributions for mean and median-based poverty notions with the median exhibiting drastically more inequality than the mean. Show more

Keywords: Income distribution, Lorenz curve, relative poverty

DOI: 10.3233/JEM-2010-0331

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 43-62, 2010

Authors: Faruqui, Umar

Article Type: Research Article

Abstract: The lack of consolidated Canadian micro data on household balance sheets and expenditures has been an important impediment to empirical research into real-financial linkages in the Canadian household sector. My paper attempts to fill this data gap by merging household …balance sheet data from the Canadian Financial Monitor survey with household expenditure data from the Canadian Survey of Household Spending. The merge process uses a categorical matching framework aimed at preserving the heterogeneity in the underlying datasets. The resulting combined dataset is a novel source of Canadian micro data on household finances and spending patterns covering the period from 1999 to 2005, with roughly 11,000 observations (households) for each year. Show more

Keywords: Micro data, surveys, data fusion, categorical matching

DOI: 10.3233/JEM-2010-0330

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 63-84, 2010

Authors: Aydede, Yigit

Article Type: Research Article

Abstract: The Turkish public pension system is the most generous pay-as-you-go (PAYG) system in the OECD region, yet totally insolvent. The present paper is the first systematic investigation to measure this unsustainable generosity by calculating the aggregate Social Security wealth (SSW) …series. The main objective of Social Security is to insure seniors against an uncertain life span. However, as PAYG systems around the world face increasing financial challenges due to aging populations and the probability of being a net loser rises for coming generations, the ability to obtain this objective is being questioned with growing public confusion: How does Social Security affect lifetime wealth? How does one calculate the financial terms of Social Security for households in different generations? Our simulations cover 1970 to 2003, and the results show that the SSW is the biggest part of household wealth in Turkey with declining implicit rates of return for different age cohorts, implying a significant unfairness among generations. Show more

Keywords: Household wealth, Social Security wealth, intergenerational wealth transfers, internal rate of return of PAYG

DOI: 10.3233/JEM-2010-0329

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 85-126, 2010

Article Type: Other

DOI: 10.3233/JEM-2010-0325

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 127-127, 2010

Authors: Anderson, Lori B. | Delgado, Michael S.

Article Type: Research Article

Abstract: This paper describes a successful attempt to replicate DeSimone [5] which investigates the effect of fraternity membership on binge drinking using both probit and interval regression models. We encountered software-related difficulties that hampered our replication effort, though ultimately we showed …that DeSimone's published results are replicable. This is due to default settings in Stata that correctly identify the problem of complete separation, in which the maximum likelihood estimator does not exist. Other statistical packages, such as R, do not recognize the complete separation problem and do not automatically remove the observations before estimation. This poses several econometric obstacles for replication. Without prior knowledge of which observations Stata drops from the probit regression, inconsistencies between the samples used for the probit and interval regression models would arise, regardless of which software package is used. Second, when attempting replication in a program, such as the GLM function in R, that does not automatically remove the necessary observations, one will not be able to exactly duplicate the results due to a sample that is not identical to the one used for estimation by Stata. Thus, without knowledge of which observations are dropped, precise replication would be impossible. Therefore, we advocate the benefits of data/code archives in facilitating accurate verification of published results. We find that once the correct sample is obtained we are able to identically replicate the paper. It should be noted that the results are qualitatively identical, regardless of which sample size or software package is used. Show more

DOI: 10.3233/JEM-2010-0326

Citation: Journal of Economic and Social Measurement, vol. 35, no. 1-2, pp. 129-147, 2010