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UBC Theses and Dissertations

Essays in economic measurement with application to Japan Mizobuchi, Hideyuki


The objective of this dissertation is to improve our understanding of economic measurement, in particular, index number theory and its application to the Japanese economy. Two different approaches exist in index number theory: the first decomposes a value ratio of costs or profits into the product of a price index times a quantity index.  The second approach decomposes a value difference in costs or profits into the sum of a price indicator plus a quantity indicator.  This thesis will examine both approaches. Following the ratio approach, our first essay will investigate the origins of the growth of the Japanese standard of living. This growth is attributed to technical progress, changes in output prices and input quantities. In many ways, improvements in the terms of trade are synonymous with technical progress, because they make it possible to obtain more for less. We compare two distinct impacts of changes in the terms of trade and technical progress on the Japanese standard of living, and will show that while technical progress made the most contribution, the impact of the changes in the terms of trade were negligible. The second and third essays follow the difference approach in index number theory. The second essay deals with the producer model and proposes a productivity analysis based on the difference approach in index number theory. We show that following the difference approach, change in real income per unit primary input can be additively decomposed into explanatory factors such as technical progress, changes in relative output prices and deflated input quantities. The third essay deals with the consumer model, introducing the concept of the exact and superlative indicator into the difference approach; we will show that the Bennet indicator is an exact and superlative indicator. The second essay applies the new decomposition result to the Japanese market sector for the years 1955–2006. The third essay uses Japanese aggregate consumption data and compares different real expenditures based on various distinct indexes and indicators.

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