USSR: Measures of Economic Growth and Development, 1950-80

Approved for Release: 2019/07/19 C05210421
years value added in each sector is computed by
finding the ratio of the value for the sector index in
each year to its value in 1972 and then multiplying
this ratio by value added in I972 as derived from the
input-output table.
Finally, to obtain the branch indexes, every sector is
first allocated to one of the 10 industrial branches.
Then for each year the estimated value added for all
of the sectors belonging to that branch are totaled.
After totals for each branch are converted to indexes
with base l970= 100, these branch indexes are equiv-
alent to an aggregation of production indexes using
value-added weights.
This procedure entails at least four possible sources of
error:
~ The samples for each sector may be unrepresenta-
tive of actual gross output over time.
- Value added may not move in the same way as gross
output because the material intensiveness of produc-
tion may have changed.
- Value-added estimates for the sectors may be wrong
because in the reconstruction of the 1972 input-
output table they were derived as a residual, and
thus are subject to all of the uncertainties that
plague any residual.
¢ The price bases of the input-output table (1972
prices) and the product sample (I967 prices) are
both different from the 1970 prices that should be
used.
These possible sources of error are discussed in detail
below in the section, “Evaluation of the New
Indexes.”
The Machinery Index
The machinery index has undergone substantial revi-
sion since the methodology was last described in 1976.
Revisions have focused on five areas:
- More machinery sectors are represented in the
producer durables indexes.
- Passenger automobiles for private purchases and
other consumer-oriented automotive products have
been shifted from the producer durables to the
consumer durables component of the machinery
index.
- Some sectors producing both consumer durables
and producer durables have separate indexes to
represent each component.
~ The Tovary series adjusted to deduct furniture
production is no longer used as the sole measure of
consumer durables."
' Finally, new weights for producer and consumer
durables have been derived with the help of the
1972 input-output table.
The machinery branch is handled differently because
we want to disaggregate branch output according to
how the machinery is used (figure 4). Since the use of
value-added weights implies a production orientation
and the different components of the machinery index
are based on end use, the disaggregation is not easy.
The first useful end-use distinction within machinery
is between civilian machinery and military machinery.
Here, military machinery excludes common-use dura-
bles—products with both civilian and military appli-
cations, such as trucks or bulldozers—because they
are already reflected in production reported by the
CSA. Since the USSR publishes no statistics on
uniquely military machinery production, we rely on
CIA estimates.
A second useful distinction within the machinery
branch is between producer durables and consumer
durables, reflected only infrequently in Soviet statis-
tics. Consumer durables output appears indirectly in
the official Tovary time series. Although SPIOER
formerly used this series as a proxy for consumer
durables, it neither consists exclusively of consumer
durables nor does it contain all consumer durables.
For example, the Tovary series includes nondurables
such as household chemicals, and may exclude the
production of passenger cars destined for private
purchase. Because reliable official data are not at
hand to separate consumer durables from producer
durables, we must use an alternative method.
" The full title of this series is “production of commodities of
cultural-everyday significance and household articles” (pr0iz-
vodstvo tovarov kul 'turno-bytovogo naznacheniya i
khozyaystvennogo abikhoda). Hereafter this series is referred to as
Tovary.
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Approved for Release: 2019/07/19 C05210421