On the Reliability of Unit Value Ratios in International Comparisons
AbstractIn this paper reliability indicators are developed for the Laspeyres and Paasche index type currency conversion factors used in the industry of origin approach to international comparisons of output. Given the fact that these conversion factors are calculated on basis of a sampling technique, sampling theory is used to develop formulae for standard errors. A comparison with the stochastic approach to index numbers is made. Empirical evidence for five bilateral comparisons in manufacturing shows that reliability differs as both sample coverage and the degree of price variability play a role. Ninety percent confidence intervals for the total manufacturing Laspeyres and Paasche unit value ratios ranged from ± 4% to ± 11% for the comparisons involving high productivity countries only, and up to ± 27% in a comparison of a low and a high productivity country. At branch level the differences are even more pronounced but no particularly (un)reliable branches could be discerned. Another issue addressed in this paper is whether products should be grouped together before estimation of the indices. Stratified sampling theory suggests that if the grouping is carried out properly, more precise estimates can be obtained. Guidelines for this intermediate grouping are given. Empirical evidence suggests that the grouping of products into four digit ISIC industries improves the estimation of the aggregate indices.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Groningen Growth and Development Centre, University of Groningen in its series GGDC Research Memorandum with number 199631.
Date of creation: 1996
Date of revision:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Diewert, Erwin, 2010.
"Notes on Unit Value Index Bias,"
UBC Departmental Archives
erwin_diewert-2010-26, UBC Department of Economics, revised 23 Sep 2010.
- Peter von der Lippe & W.Erwin Diewert, 2010. "Notes on Unit Value Index Bias," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(6), pages 690-708, December.
- Timmer, Marcel P., 1999.
"Climbing the technology ladder too fast? : an international comparison of productivity in South and East-Asian manufacturing, 1963-1993,"
CCSO Working Papers
199919, University of Groningen, CCSO Centre for Economic Research.
- Timmer, Marcel P., 1999. "Climbing the Technology Ladder Too Fast? An International Comparison of Productivity in South and East- Asian Manufacturing, 1963-1993," Eindhoven Center for Innovation Studies (ECIS) working paper series 99.2, Eindhoven Center for Innovation Studies (ECIS).
- Szirmai, Adam & Yamfwa, Francis & Lwamba, Chibwe, 2002.
"Zambian manufacturing performance in comparative perspective,"
GGDC Research Memorandum
200253, Groningen Growth and Development Centre, University of Groningen.
- Yamfwa, F. & Szirmai, A.S. & Chibwe Lamba, 2002. "Zambian Manufacturing Performance in Comparative Perspective," Eindhoven Center for Innovation Studies (ECIS) working paper series 02.21, Eindhoven Center for Innovation Studies (ECIS).
- Adam Szirmai & Ruoen Ren & Manyin Bai, 2005. "Chinese Manufacturing Performance in Comparative Perspective, 1980-2002," Working Papers 920, Economic Growth Center, Yale University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joke Bulthuis).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.