Journal of Economic and Social Measurement - Volume 21, issue 1

Authors: Swanson, David A. | Tayman, Jeff | Beck, Don

Article Type: Research Article

Abstract: Utility has recently been proposed as a criterion for evaluating forecasts because of problems that arise from evaluations that focus exclusively on accuracy, which is the normative expectation for evaluating forecasts. Utility is used to evaluate the lagged ratio-correlation method …as a short-term projection tool. The utility of the lagged ratio-correlation is compared with two alternatives, exponential extrapolation and the Cohort-Component Method, using data from a case study for Washington State counties at three points in time, 1970, 1980 and 1990. Together, these three projection methods represent the range of current practice in regard to resource requirements and accuracy. Each method's utility is measured using Proportionate Reduction In Error (PRE) techniques. These show the reduction in average error across counties that occurs by using each projection method instead of the previous census as a forecast of county population, which is virtually a no-cost forecasting tool. Reductions in error are examined relative to the higher “cost” associated with each of the three projection methods. The evaluation suggests that the lagged ratio-correlation method consistently has a high level of utility for all three timepoints. It achieves reductions in error that are comparable to those achieved by the Cohort-Component Method, yet with much less resource requirements. The exponential extrapolation method is found to have high and moderate utility in two of the three timepoints. Show more

DOI: 10.3233/JEM-1995-21101

Citation: Journal of Economic and Social Measurement, vol. 21, no. 1, pp. 1-16, 1995

Authors: Shriver, Keith A.

Article Type: Research Article

Abstract: Many researchers, users, preparers, and regulators of financial and economic data are advocating the utilization of enhanced valuation models to improve both macroeconomic and microeconomic analyses. The purpose of this article is to review and analyze the research on the measurement of current cost (CC) data in the financial accounting and reporting literatures. This review includes an analysis of the accounting research on the measurement of CC data for new …assets, used assets, and depreciation. The research suggests that, in general, an overstatement bias exists in the CC estimates of industrial machinery and equipment. This bias, however, could be substantially reduced or virtually eliminated by the adoption of a tax adjusted fundamental value (FV) model. These findings should be useful to economic researchers and economic policy institutions in their attempts to measure the capital stock, projected capital expenditures, and capital consumption adjustments for various firms, industries, and the economy as a whole. Show more

DOI: 10.3233/JEM-1995-21102

Citation: Journal of Economic and Social Measurement, vol. 21, no. 1, pp. 17-31, 1995

Authors: Asher, Martin A. | Defina, Robert H.

Article Type: Research Article

Abstract: This article re-examines standard methodology used to eliminate the impact of changes in age composition and age-income profiles on trends in income inequality. Attempts at such adjustment rely primarily on the approach developed in Paglin (1975) or on subsequent refinements …of the Paglin measure (Formby et al., 1989). The present study identifies fundamental shortcomings in the approach and, hence, in associated estimates. To illuminate the degree of imprecision associated with the Paglin-type measure, the paper employs an alternative age-adjustment procedure based on an Entropy measure of dispersion discussed in Shorrocks (1980) and Mookherjee and Shorrocks (1982). The Entropy measure overcomes the problems with Paglin's approach and allows age-related changes to be accurately identified. Comparing age-adjusted inequality changes between 1980 and 1986 calculated in Formby et al. (1989), which are based on the Paglin-type measure, with those based on the Entropy measure reveals that the former approach overstates the importance of age by over 60 percent. Show more

DOI: 10.3233/JEM-1995-21103

Citation: Journal of Economic and Social Measurement, vol. 21, no. 1, pp. 33-44, 1995

Authors: Levy, Daniel

Article Type: Research Article

Abstract: I estimate time varying aggregate capital stock depreciation rates for the post-war U.S. economy using capital-investment evolution equation along with the data on the annual net capital stock and corresponding quarterly gross investment series. I estimate depreciation rates of consumer durable goods, producer durable goods, and nonresidential business structures. The estimation results suggest that the three depreciation rate series have been behaving very differently over time. In particular, I find …that over time the implied depreciation rate of nonresidential business structures has remained stable, the implied depreciation rate of consumer durable goods has been steadily declining, while the implied depreciation rate of producer durable goods has been increasing, especially during the last 10–15 years. These findings are interpreted in terms of the changes in the composition of the aggregate nonresidential business fixed and producer durable good capital stocks. In addition, I discuss the implications of the changes introduced during the 1980s in rules and regulations governing a depreciation accounting for tax purposes, and their effect on the estimates of capital depreciation rates derived in this paper. The main argument the paper makes is that technological progress may be leading to accelerated depreciation of producer durable goods and equipment since newer and more advanced technology makes older equipment obsolete. The empirical evidence reported in this paper supports this argument. Show more

DOI: 10.3233/JEM-1995-21104

Citation: Journal of Economic and Social Measurement, vol. 21, no. 1, pp. 45-65, 1995

Authors: Yang, Jichung | Adams, F. Gerard

Article Type: Research Article

DOI: 10.3233/JEM-1995-21105

Citation: Journal of Economic and Social Measurement, vol. 21, no. 1, pp. 67-83, 1995