- What price a roof? Housing and the cost of living in 16th-century Toledo
Drelichman, Mauricio, University of British Columbia - Economics, drelichm@interchange.ubc.ca
Gonzalez Agudo, David, Universidad Complutense de Madrid,
Data on housing costs and rental markets for the early modern period are notoriously scarce. We build a database of rent paid on 183 properties belonging to the Cathedral Chapter of Toledo between 1489 and 1600. Using detailed information on location, physical characteristics of the property, and the identity of the renter, we reconstruct housing costs for various social groups and trace the effect of exogenous shocks on the rental market. We then use our data to explore the impact of adding rent to early modern price indices and estimates of living standards. Price indices show a moderate effect. When comparing the living standards of Toledo to two northern European locations, the addition of rent reduces the gap between them by up to 9.5%.
Creation Date: 2012-04-09 Revision Date: 2012-04-09
- Problems with the Measurement of Banking Services in a National Accounting Framework
Diewert, Erwin, University of British Columbia - Economics, diewert@econ.ubc.ca
Fixler, Dennis, Bureau of Economic Analysis, Dennis.Fixler@bea.gov
Zieschang, Kimberly , International Monetary Fund, kzieschang@imf.org
The paper considers some of the problems associated with the indirectly measured components of financial service outputs in the System of National Accounts (SNA), termed FISIM (Financial Intermediation Services Indirectly Measured). The paper utilizes a user cost and supplier benefit approach to the determination of the value of various financial services in the banking sector. The present paper also attempts to integrate the balance sheet accounts in the SNA with the usual flow accounts. An empirical example of various nominal output concepts that could be applied to the U.S. commercial banking sector is presented.
Creation Date: 2012-04-04 Revision Date: 2012-04-04
- Irving Fisher and Index Number Theory
Diewert, Erwin, University of British Columbia - Economics, diewert@econ.ubc.ca
There are four main approaches to bilateral index number theory: the fixed basket, stochastic, test and economic approaches. The paper reviews the contributions of Irving Fisher to these approaches to index number theory which are still in use today. The paper also reviews Fisher’s contributions to multilateral index number theory. The main themes of the paper are developed in the context of a review of the early history of index number theory: a history that conveys a wealth of information and insight into the making and use of index numbers today.
Creation Date: 2012-03-01 Revision Date: 2012-03-01
- Promoting Competition by Coordinating Prices: When Rivals Share Intellectual Property
Gallini, Nancy, University of British Columbia, ngallini@exchange.ubc.ca
The paper examines technology agreements and the standards process from which they emerge when members supply inputs to the alliance while simultaneously competing with it. Under this overlapping ownership structure, pool members are horizontally related. I show that strategic complementarity between the downstream products owned by a member and those arising from the collaboration is sufficient for a pool to be pro-competitive. Although patent pools are more efficient than uncoordinated pricing, consumers are better off if an outside firm rather than a pool member owns the non-pool competing product. Antitrust rules facilitating efficient IP agreements under overlapping ownership and their implications for the direction of technological change are derived.
Creation Date: 2012-02-07 Revision Date: 2012-02-07
- Limited Participation in International Business Cycle Models: A Formal Evaluation
Gao, Xiaodan, University of British Columbia, gao.xiaodan@gmail.com
Hnatkovska, Viktoria, University of British Columbia, hnatkovs@mail.ubc.ca
Marmer, Vadim, University of British Columbia - Economics, vmarmer@interchange.ubc.ca
In this paper we study the role of limited asset market participation (LAMP) for international business cycles. We show that when limited participation is introduced into an otherwise standard model of international business cycles, the performance of the model improves significantly, especially in matching cross-country correlations. To perform formal evaluation of the models we develop a novel statistical procedure that adapts the test of Vuong (1989) to DSGE models and accounts for the possibility that models are misspecified. Based on this test we show that the improvements brought out by LAMP are statistically significant, leading a model with LAMP to outperform a representative agent model. Furthermore, when LAMP is introduced, a model with complete markets is found to do better than a model with no trade in financial assets -- a well-known favorite in the literature. Our results remain robust to the inclusion of investment specific technical change.
Creation Date: 2012-01-24 Revision Date: 2012-01-24
- Instrumental Variables Estimation and Weak-Identification-Robust Inference Based on a Conditional Quantile Restriction
Marmer, Vadim, University of British Columbia - Economics, vmarmer@interchange.ubc.ca
Sakata, Shinichi, University of Southern California, shinichi.sakata@gmail.com
Extending the L1-IV approach proposed by Sakata (1997, 2007), we develop a new method, named the $rho_{tau}$-IV estimation, to estimate structural equations based on the conditional quantile restriction imposed on the error terms. We study the asymptotic behavior of the proposed estimator and show how to make statistical inferences on the regression parameters. Given practical importance of weak identification, a highlight of the paper is a proposal of a test robust to the weak identification. The statistics used in our method can be viewed as a natural counterpart of the Anderson and Rubin's (1949) statistic in the $rho_{tau}$-IV estimation.
Creation Date: 2011-09-28 Revision Date: 2011-09-28
- Methods of Aggregation above the Basic Heading Level within Regions
Diewert, Erwin, University of British Columbia - Economics, diewert@econ.ubc.ca
The paper explains part of the methodology that was used in the 2005 International Comparison Program (ICP) that compared the relative price levels and GDP levels across 146 countries and 5 regions. This paper looks at the methodology which was used in order to calculate relative volumes and Purchasing Power Parities (PPPs) within each region. In previous rounds of the ICP, only two multilateral methods were used: the Gini Eltetö Köves Szulc (GEKS) method and the Geary Khamis (GK) method, which is an additive method. The axiomatic and economic properties of these methods and a relatively new additive method, the Iklé Dikhanov Balk (IDB) method used by the African region, are studied. A fourth method, the Minimum Spanning Tree method, due to Robert Hill is also studied.
Creation Date: 2011-09-23 Revision Date: 2011-09-23
- Methods of Aggregation above the Basic Heading Level: Linking the Regions
Diewert, Erwin, University of British Columbia - Economics, diewert@econ.ubc.ca
The paper explains part of the methodology that was used in the 2005 International Comparison Program (ICP) that compared the relative price levels and GDP levels across 146 countries and 5 regions. Each of the regions constructed its own set of Purchasing Power Parities (PPPs) and relative country expenditure volumes. The paper studies various methods for constructing a global set of relative country volumes and PPPs while respecting the regional parities—the fixity constraint. Two methods emerge as having good properties: a method due to Heston and Dikhanov and an alternative method due to Eurostat, the OECD and Robert Hill. Some small numerical examples illustrate the differences between the various methods.
Creation Date: 2011-09-23 Revision Date: 2011-09-23
- Afriat's Theorem and Some Extensions to Choice under Uncertainty
Diewert, Erwin, University of British Columbia - Economics, diewert@econ.ubc.ca
The first part of the paper reviews the methodology developed by Sydney Afriat for determining whether a finite set of price and quantity data are consistent with utility maximizing behavior by a consumer. Some extensions of his basic model to models of consumer behavior where the structure of preferences is restricted in some way are also explained. Examples of special structures are homotheticity, separability and quasilinearity of the utility function. The second half of the paper is devoted to developing Afriat type consistency tests for expected and nonexpected utility maximizing behavior.
Creation Date: 2011-09-01 Revision Date: 2011-09-01
- The Measurement of Banking Services in the System of National Accounts
Diewert, Erwin, University of British Columbia - Economics, diewert@econ.ubc.ca
Fixler, Dennis, Bureau of Economic Analysis,
Zieschang, Kimberly, International Monetary Fund,
The paper considers some of the problems associated with the indirectly measured components of financial service outputs in the System of National Accounts (SNA), termed FISIM (Financial Intermediation Services Indirectly Measured). The paper characterizes FISIM by a user cost and supplier benefit approach determining the price and quantity of various financial services in the banking sector. We examine the need for FISIM in the context of plausible alternative accounting schemes that could be used to account for financial services. The alternative accounting frameworks have implications for the labour and multifactor productivity of both the financial and nonfinancial sectors.
Creation Date: 2011-09-01 Revision Date: 2011-09-01
Home