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It has often been claimed that it is impossible to measure human capabilities but within the methodological conventions of household survey design, this chapter shows that some non-financial capability indicators do already exist and this chapter demonstrates how similar indicators, covering a wide range of life domains, can be constructed. This chapter draws on a continuing research project which contributes to the operationalization of the capabilities approach by devising over sixty capability indicators which can be used to extend coverage of indices such as HDI, illustrating different ways in which such indicators may be analysed, and discussing some of the associated methodological issues that have emerged in the process. Based on usable observations from a national UK sample of 1,000 adults, this chapter uses latent class analysis to identify an impoverished group of respondents with low capabilities across the board, builds models of experienced violence and subjective wellbeing as a function of experienced and anticipated violence, and explores the relationship between capability indicators and subjective wellbeing. Substantive findings include: the identification of a group with low all round capabilities associated with low health and low income; evidence that fear of future violence can be a more significant determinant of subjective wellbeing than past experience of violence; and evidence which supports the view that a large diverse set of non-financial dimensions of capability have a detectable impact on subjective wellbeing. The chapter concludes by discussing some of the econometric issues that have emerged in the course of this work.

This chapter investigates the consumer price index (CPI) to help elucidate the nature of the problems commonly found in many important official economic statistics of Japan. First, it offers an overview of official statistics in Japan, points out several important deficiencies, and then reviews key issues in the CPI. Using this background, potential problems in several major aspects of the CPI are investigated. These include data collection procedures (including how discounted prices are handled), services, quality change and new products, and aggregation issues (substitution across time, brands, and stores). Next, the chapter looks at a discrepancy between CPI and wholesale price index that probably relates to differences in how quality adjustments are made, and some hitherto neglected aspects of the measurement problem, relating to shopping and storage behaviors. From this analysis, it offers a tentative assessment of the magnitude of the CPI inflation rate bias, and suggests ways to improve the statistics in general and the CPI in particular.

The idea of ‘gross domestic product’ as the annual flow of national output dates back to the eighteenth century, but it was only in the mid-twentieth century that it became a reliable number. This chapter examines the efforts made by economists and statisticians in Britain to establish a reliable empirical foundation for economic management during the interwar period, and shows how the imperatives of wartime administration stimulated the formulation of national income as a set of accounts in terms of which the national budget was formulated in 1941.

This introduction outlines how the idea of a national economy subject to governmental management was constructed in Britain out of the dissolution of the unmanaged economy of the pre-1914 era. It argues that a key turning point came in 1931 with the departure from the gold standard and the introduction of protection. But, it is argued, it was only from the 1940s that national economic management was combined with ‘managing the people’, through major efforts to shape public opinion on the economy. This chapter also summarizes the development of the major kinds of economic statistics which underpinned both facets of economic management.

In recognition of Zvi Griliches's contributions to the cause of economic measurement and to identify and build on ways in which further progress can be made in improving the quality of our economic statistics, the CRIW sponsored a conference held in the Washington, D.C. area on September 19–20, 2003. This conference focused primarily on economic measurement issues in the areas of productivity, price hedonics, capital measurement, diffusion of new technologies, and output and price measurement in hard-to-measure sectors of the economy. This introductory chapter provides an overview of the papers included in this tribute to Zvi Griliches, which encompass a series of topics in economic measurement to which he contributed directly, exhibited an abiding interest in, or supported indirectly through his role as director of the NBER Program on Technological Change and Productivity Measurement.

This chapter develops a framework for integrating economic statistics from various sources into a unified and internally consistent database. The goal is to present the data in such a way that users can easily change assumptions regarding the way the data are organized and classified, so as to efficiently assess the robustness of their estimates to variations in methodology. The usefulness of this framework is illustrated by applying it to productivity measurement in light of the Y2K problem, and the possible acceleration of capital retirement during the rush to invest in Y2K-compliant IT capital. When corrections are made for this effect, the growth rate of multifactor productivity in the nonfarm business sector is larger in the period 1995–1999 and smaller for subsequent years 2000 and 2001. The contribution of capital is correspondingly smaller in the first period and larger in the second. This pattern is of potential importance for the literature on the role of IT investment in the widely discussed post-1995 productivity pick-up.