PROBLEMS OF IDENTIFYING AND MEASURING INTERMEDIATE (PRODUCER) SERVICES IN THE COMPILATION AND USE OF INPUT-OUTPUT TABLES*

The paper is mainly concerned with statistical problems relating to intermediate services that arise in the construction of national input-output (I–O) tables. Though these problems are sometimes discussed in the literature, their precise nature is usually not spelled out in any detail and this is done in the paper. The problems are closely related to the company-establishment statistical dichotomy permeating the ultimate sources and allocation of intermediate services. Important examples can be found regarding the statistical treatment of head offices, research and development expenditures, and international trade of intermediate services. Presently used procedures for Canadian and U.S. I–O compilation show evidence of statistical inconsistencies and lack an appropriate framework to utilize full information. The paper suggests a possible approach for reconciling company and establishment data based on industrial organization linkage studies at the microlevel. Considerable empirical support is offered, using various official Canadian statistical publications, to show that the suggested approach is both feasible and has desirable properties. The paper goes on to argue that the contemporary information technology revolution has profound implications for I–O compilation and use with special reference to intermediate services. Four major implications are explained in the context of the growing microelectronics technological change and related literature. Some basic suggestions are put forward with regard to joint-cost allocation and inter temporal comparisons problems with respect to I–O compilation. It also appears that some fundamental rethinking of commonly accepted standard industrial classification conventions may be called for in the near future if I–O tables are to remain relevant and viable. The paper thus features a somewhat broader view of I–O statistical problems than usual and attempts to show that this view is potentially appropriate to questions of economic policy formulation.     

The Optimal Mortgage Payment Path Under Price Uncertainty

It has been shown that in a world of certainty, individuals with rising income streams will choose a graduated payment mortgage over the standard flat payment mortgage. The present paper extends this analysis by introducing uncertainty about future inflation rates. We show that the risk-averse individual, when faced with uncertainty, will choose a less graduated payment path than in the certainty situation. While not conclusive, the analysis may cast some doubt on the suboptimality of the standard flat payment mortgage.     

Challenges in quantitative economic analysis in support of multilateral trade negotiations

A wide range of economic analysis of agricultural trade liberalization was performed prior to and during the Uruguay Round of trade negotiations. Views differ as to the effectiveness of this research, although most would agree that it became less relevant as the negotiations progressed. This paper reviews the contributions of economists to the trade liberalization debate, with an emphasis on the quantitative assessment of multilateral agricultural trade liberalization. With a new round of agricultural trade negotiations scheduled to begin in 1999 it is crucial that the quantitative work required to support these negotiations begin in the near future. The authors conclude that the Uruguay Round outcome provides numerous challenges and opportunities in analyzing the traditional agenda of agricultural trade liberalization. In addition, new issues will be added to the agenda of the next round of negotiations. These include: trade and the environment, competition policy and intellectual property rights. It is important that economists begin to develop a research agenda that can address these issues and become activists in addressing these topics in public forums.     

On the merits of plant-based proteins for global food security: Marrying macro and micro perspectives

This paper aims to demonstrate the importance of protein production for the global environment and to give insight into the way consumers frame the protein part of their meal. Using a macro perspective, it presents a review of the literature on current and future impacts of the nutritional transition that has made animals the chief source of protein in many countries. Protein-related environmental pressure is put into the perspective of a number of vital Earth-system processes whose boundaries have already been overstepped or are under threat of transgression. To inform policy-makers about these linkages a long-term global food security frame is proposed. Using a micro perspective, survey data on consumers reveal that their frames and habits are strongly adapted to the current meat system. Although this system has induced some pickiness about meat as well as uneasiness about meat's animal origin, there is a large psychological distance between consumers and experts in their view of protein sources. It is suggested that a global food security frame may help to bridge this distance by creating overlapping frames, capturing both altruistic aspects and a reasonable measure of self-interest. This may enable a novel protein transition, featuring a greater share of plant-based protein.     

The dynamics of industrial concentration in Australian manufacturing

A dynamic model of concentration is developed, with incomplete and industry-specific adjustment to deviations of concentration from its steady state. Cross-sectional analysis is carried out against a sample of 102 Australian manufacturing industries at the Australian Standard Industrial Classification (ASIC) four-digit level over the period 1977/78–1984/85. The estimated adjustment is faster than found in studies of the more mature industrial economies and this adjustment is found to significantly increase with reductions in tariff protection. There is also empirical support for John Sutton's argument that the relationship between concentration and market size depends on whether set-up costs are exogenous.     

Bilateral foreign aid: how important is aid effectiveness to people for choosing countries to support?

We conduct a discrete choice experiment to determine how important aid effectiveness is to people relative to other criteria for choosing countries to support with bilateral foreign aid. We find that aid effectiveness is important, on a par with recipient-country need as proxied by the level of hunger and malnutrition. Both criteria are more important than others.     

THE 1993 REVISED SYSTEM OF NATIONAL ACCOUNTS: WHERE DO WE GO FROM HERE?

The 1993 System of National Accounts is a remarkable document, but the System also has some major imbalances and omissions. The present paper spells out four aspects of the SNA that require further development: (1) accounting for the costs of economic change; (2) delineation of information as an economic commodity; (3) overhaul of the methodology underlying input-output accounts; and, (4) consequences of the System's implicit use of compacted accounting. These developments can be incorporated in a Supplementary Document in the near future. We need not wait 25 years.     

The stochastic implications of rent maximization: an application to stumpage rates for timber in British Columbia

We construct a model of rent‐maximizing behaviour by a single seller of timber in the absence of a formal market, deriving the stochastic implications of rent maximization for timber prices (stumpage rates) when other input and output (lumber) prices are random. Subsequently, we examine the model's ability to describe monthly, time‐series, stumpage‐rate data from British Columbia, Canada between January 1979 and October 1999. Deviations of stumpage rates from their long‐run trend are also structured by an error‐correction model which suggests that between 13 and 20% of period‐to‐period changes in stumpage rates can be explained by an equilibrium adjustment term. Copyright © 2004 John Wiley & Sons, Ltd.