Price indices for industrial R&D: A project level approach

In this paper a fairty tractable approach which managers could use to infer the rate of increase in relative RBD costs over time using actual RBD expenditure data is demonstrated. Two common measures of relative cost increase which in a sense represent bounds, the Laspeyres and Faaschs indices, are estimated for a firm, based on representative projects performed by the firm. The results which are consistent with rnothear study using company level data indicate that the official R&D statistics tend to exaggwate the increase during 1M9‐79 in industrial RhQ performance. In particular using the GNP deftstor, one would appuently Qwmimate real 1979 R&D expenditures (in 1963 dolfatrs) by almost 20% in the chemical industry atone.