Aggregation of tangible capital assets across vintages and decomposition of value aggregates into quantities and prices are considered. Focus is on both capital stock values and capital service values. If the definitions and ways of measuring prices and quantities are not conformable, a third component, denoted a quality component, may have to be included as a buffer. Should it then be suppressed by allocating it to either of the price and quantity components, or should quality be accounted for separately? In discussing these issues, five quantity variables and five price variables are involved. Some of them are observable from market data without large efforts, some are essentially unobservable, and some can be quantified only if certain (often non-testable) assumptions are made. Illustrations based on parametric functions are given.
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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number
518.
Find related papers by JEL classification: C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
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