Superlative Index Numbers and Consistency in Aggregation

Diewert, W. Erwin

doi:10.2307/1909755

Cited by 355 publications

(226 citation statements)

References 14 publications

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“…In addition, it can be shown that the Törnqvist index closely approximates the Fisher Ideal index, which has a slightly stronger justification from the axiomatic approach. This is a result in numerical analysis and does not depend on assumptions of optimising behaviour (Diewert, 1978). Hence, there are strong reasons for the choice of the Törnqvist index over many other index-number formulae, and therefore a justification exists from the axiomatic approach to index numbers for the profit decomposition represented by equations (3), (6) and (7).…”

Section: Methodsmentioning

confidence: 99%

The contributions of productivity, price changes and firm size to profitability

Lawrence¹,

Diewert

Fox

2006

J Prod Anal

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Sources of profit change for Telstra, Australia's largest telecommunications firm, are examined. A new method allows for changes in a firm's profits to be broken down into separate effects due to productivity change, price changes and growth in the firm's size. This in turn allows us to calculate the distribution of the benefits of productivity improvements between consumers, labour and shareholders. The results show that around half the benefits from Telstra's productivity improvements from 1984 to 1994 were passed on to consumers in the form of real price reductions.JEL Classification: C43, D24

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Section: Methodsmentioning

confidence: 99%

The contributions of productivity, price changes and firm size to profitability

Lawrence¹,

Diewert

Fox

2006

J Prod Anal

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“…An (approximate) solution to this problem is to use the "Fisher of Fishers" approach suggested by Diewert (1978). The basic idea is to take the real values and their associated price indexes for the categories of interest and then compute Fisher indexes of these measures-hence the "Fisher of Fishers" name.…”

Section: Measurement Issuesmentioning

confidence: 99%

International Trade and Intertemporal Substitution

Leibovici

Waugh

2017

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------------------------------------This paper quantitatively investigates the extent to which variation in the intertemporal marginal rate of substitution can help account for puzzling features of cyclical fluctuations of international trade volumes. Our insight is that, because international trade is time-intensive, variation in the rate at which agents are willing to substitute across time affects how trade volumes respond to changes in output and prices. We use a standard small open economy model with time-intensive international trade, calibrated to match key features of U.S. data and disciplining the variation in the intertemporal marginal rate of substitution using asset price data. We find that variation in the intertemporal marginal rate of substitution helps rationalize puzzling features of import fluctuations and that this mechanism is quantitatively important during both normal and crisis times.--

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“…is idea provides the intuition behind the linear program developed by Fleissig and Whitney (2003). In particular, these authors determine the values of 1/δ * t and V * t based on the theory of superlative index numbers (see Diewert (1976Diewert ( , 1978). A superlative index number provides an exact index number for some order approximation of the underlying (in casu homogeneous) utility function s. However, this test is again only sufficient but not necessary for weak separability to hold.…”

Section: (Iv) For All T ∈ T There Exist Numbers S T and U T And Strimentioning

confidence: 99%

Revealed preference tests for weak separability: An integer programming approach

Cherchye

Demuynck

Rock

et al. 2015

Journal of Econometrics

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We focus on the revealed preference conditions that characterize the collection of nite data sets that are consistent with the maximization of a weakly separable utility function. From a theoretical perspective, we show that verifying these revealed preference conditions is a difficult problem, i.e. it is np-complete. From a practical perspective, we present an integer programming approach that can verify the revealed preference conditions in a straightforward way, which is particularly attractive in view of empirical analysis. We demonstrate the versatility of this integer programming approach by showing that it also allows for testing homothetic separability and weak separability of the indirect utility function. We illustrate the practical usefulness of the approach by an empirical application to Spanish household consumption data. In this application we also include two statistical tests in which we account for measurement error. JEL Classi cation: C14, C60, D01, D10.Keywords: weak separability, revealed preference, integer programming * We thank Ian Crawford for generously providing us the data of the Encuesta Continua de Presupestos Familiares (ECPF), which we use in our empirical study. We are also grateful to Adrian Fleissig, James Swofford and Gerald Whitney for helpful comments. is paper is a merger of two working papers, Cherchye, Demuynck, and De Rock (2011c) and Hjertstrand (2011

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Superlative Index Numbers and Consistency in Aggregation

Cited by 355 publications

References 14 publications

The contributions of productivity, price changes and firm size to profitability

The contributions of productivity, price changes and firm size to profitability

International Trade and Intertemporal Substitution

Revealed preference tests for weak separability: An integer programming approach

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