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THE INADEQUACY OF UNIT VALUE INDEXES AS PROXIES FOR CANADIAN INDUSTRIAL SELLING PRICE INDEXES *
Author(s) -
Holmes R. A.
Publication year - 1973
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1973.tb00891.x
Subject(s) - economics , value (mathematics) , unit (ring theory) , index (typography) , variable (mathematics) , commodity , econometrics , price index , variance (accounting) , unit of account , industrial production index , statistics , mathematics , microeconomics , macroeconomics , accounting , production (economics) , finance , computer science , mathematical analysis , mathematics education , currency , world wide web
This paper considers the adequacy of unit value indexes as proxies for industrial selling price indexes in Canada, in light of the considerations raised in the Searle report for the United States (summarized elsewhere in this issue). Some 3,237 regressions are run using the industrial selling price index for a commodity group as the dependent variable and the corresponding unit value index as the independent variable. The unit value indexes perform poorly as predictors of the I.S.P.I.; the overall tendency is for the unit value index to overestimate changes in the I.S.P.I.; and to explain on average only about 30 percent of the total variance of the I.S.P.I.