Page 275 - Special Topic Session (STS) - Volume 4

STS587 Hui W. et al.
Using firm level data to study import/export components of value added
across industries. Research on the impact of FDI on TFP measurement and
national income account. Research on how MNEs produce knowledge-based
assets globally.

3. Results
3.1 Old problems – quality change and services output measurement
‘Chronical diseases’ of GDP become more incurable: Quality change and
new products; Services industry output measurement.
(1) Measuring quality changes
The quality change problem arises when a more desirable new model of a
good does not cost much more than the old. Constructing quality adjusted
price indexes has been always difficult. The challenge is much bigger today
with profusion of new and improved goods in the growing digital economy.
Research on measuring quality change will be on agendas of economic
statistics conferences for years to come.
(2) New goods problem
The new goods problem is even more challenging, as there are no prior
versions of the good on which to base price comparisons. Current procedures
for incorporating new goods into existing price indexes are complicated, but
may miss much of the value of these innovations. By implication, the benefits
of important new information technology goods, like the Internet and the
many applications it enables, may be subject to significant undervaluation.
(3) Hard- and easy-to-measure industries
Easy to measure industries: Agriculture, mining, manufacturing,
Transportation, utilities; But digital services are hard to measure now. Hard to
measure industries: Most are knowledge intensive services industries,
professional and business services; The real challenges is can we measure the
HTMI?
(4) Increasing importance of services industries
Knowledge-based services industries have been transformed by digital
technologies: Health care, Finance, Education. The output measures of health
care and education are still input based in official GDP statistics. The accuracy
of measured economic growth critically depends on how services outputs are
measured.
(5) Output concept
SNA08 (6.89): output is defined as the goods and services produced by an
establishment. Output is an intuitively simple concept in a textbook
production function, but there is a great diversity of products in real world,
tangible and intangible, differences in quality and variety. Aggregation is
necessary so that real outputs are measured as to synthetic constructs, no

264 | I S I W S C 2 0 1 9