Miquel Clar (Research Group Anàlisi Quantitativa Regional, Department of Econometrics, Statistics and Spanish Economy, University of Barcelona, Avda. Diagonal, 690, 08034 Barcelona, Spain) Raúl Ramos (Research Group Anàlisi Quantitativa Regional, Department of Econometrics, Statistics and Spanish Economy, University of Barcelona, Avda. Diagonal, 690, 08034 Barcelona, Spain) Jordi Suriñach (Research Group Anàlisi Quantitativa Regional, Department of Econometrics, Statistics and Spanish Economy, University of Barcelona, Avda. Diagonal, 690, 08034 Barcelona, Spain)
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In this research note we propose a latent variable model in the spirit of Israilevich and Kuttner (1993) to measure regional manufacturing production. In order to test the validity of the proposed methodology, we apply it for those Spanish regions that have a direct quantitative index. The results demonstrate the accuracy of the methodology proposed and show that it can overcome some of the difficulties of the indirect method applied by the INE, the Spanish National Institute of Statistic s.
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