Multiplicative Decomposition And Index Number Theory: An Empirical Application Of The Sato-Vartia Decomposition
In de Boer (2008), additive decompositions of aggregate changes in a variable into its factors were considered. We proposed using the 'ideal' Montgomery decomposition, developed in index number theory as an alternative to the commonly used methods in structural decomposition analysis, and applied it to the example analyzed by Dietzenbacher and Los (1998) (D&L). In this paper we consider multiplicative decompositions and show that the method proposed by D&L of taking the geometric mean of all elementary decompositions is 'ideal'. However, it requires the computation of an ever-increasing number of decompositions when the number of factors increases. As an alternative, we propose using the Sato-Vartia decomposition, which is also 'ideal', but requires the computation of only one decomposition. Application to the example of D&L reveals that the two methods yield results that are very close to each other.
Volume (Year): 21 (2009)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CESR20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CESR20|
When requesting a correction, please mention this item's handle: RePEc:taf:ecsysr:v:21:y:2009:i:2:p:163-174. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst)
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.