Premium
CORRECTLY MEASURING REAL VALUE ADDED
Author(s) -
Cassing Shirley
Publication year - 1996
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.1475-4991.1996.tb00166.x
Subject(s) - deflation , divisia index , economics , value (mathematics) , measure (data warehouse) , econometrics , order (exchange) , index (typography) , mathematical economics , macroeconomics , mathematics , computer science , statistics , monetary policy , finance , database , world wide web , energy (signal processing) , energy intensity
This paper examines issues involved in calculating a value added index in order to measure real value added at the industry level. Three methods of calculating real value added are considered; the Laspeyres double‐deflation method recommended by the United Nations System of Nation Accounts , the commonly used single‐deflation method, and the double‐deflation Divisia method. Actual data are employed to clarify and illustrate the issues involved, and the paper concludes with a recommendation for an appropriate index to use when calculating industry real value added.