Depreciation, Deterioration and Obsolescence when there is Embodied or Disembodied Technical Change
AbstractThe paper considers how to measure capital in a model where technical progress is either embodied in new units of capital or it is "disembodied" and simply causes the price of capital services to fall. The disembodied case is considered in sections 2-4. Sections 2 and 3 set out standard vintage capital aggregation models when there is no embodied technical progress. Section 4 discusses disembodied obsolescence in more detail. Section 5 introduces new (more efficient) models of the capital good so that technical progress is embodied in the new models. Section 6 shows how the parameters in the Jorgenson model of capital services could be estimated by statistical agencies if their investment surveys covered sales and retirements of used assets as well as purchases of new assets. Section 7 concludes.
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Bibliographic InfoPaper provided by UBC Department of Economics in its series UBC Departmental Archives with number diewert-06-11-23-08-38-56.
Length: 31 pages
Date of creation: 23 Nov 2006
Date of revision: 13 Jul 2007
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Aggregation of Capital; embodiment of technical progress; depreciation; deterioration; obsolescence; index number theory;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Financing, Investment, and Capacity
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- M4 - Business Administration and Business Economics; Marketing; Accounting - - Accounting
This paper has been announced in the following NEP Reports:
- NEP-ACC-2006-12-04 (Accounting & Auditing)
- NEP-ALL-2006-12-04 (All new papers)
- NEP-BEC-2006-12-04 (Business Economics)
- NEP-MAC-2006-12-04 (Macroeconomics)
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