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

Approved for Release: 2019/07/19 C05210421
an index of official retail prices (including CFM
prices) grows much more rapidly than the CIA index
of real per capita consumption.
Soviet Measures CIA Index
Current Constant Constant
Prices Prices Prices
1960 100.0 100.0 100.0
1975 211.1 209.6 166.8
Average annual 5.1 5.1 3.5
growth
The Soviet government also gauges progress in raising
1iv_ing standards by a regularly published statistical
series labeled “real incomes of the population,” ex-
pressed per capita. Although the exact nature of this
published statistic is something of a puzzle “ it
apparently measures real per capita consumption of
goods and material services.“ As described in an
official source, the calculation for each year: (1) begins
with money incomes from all sources (2) deducts taxes,
savings, change in bank loans and cash balances, and
payments for services to arrive at money expenditures
for the purchase of goods (3) adds incomes in kind,
material expenditures (including depreciation) of insti-
tutions serving the population—transportation, health,
education and others—payments for utilities, the value
of cooperative housing constructed, and depreciation
on state housing, and (4) deflates current values with
an index of the prices of goods. In coverage, it differs
from the CIA index of consumption, mainly by
inclusion of cooperative housing, depreciation on
housing and on the capital stock in services and by
exclusion of labor services. As Table 6 shows, the
official index grows much more rapidly than the CIA
index——almost half again as fast for the period as a
whole. The difference is greater in the 1970s than in
earlier periods.
The reasons for the faster growth of the official index
of real incomes are obscure. Neither the structure of
that index in current values nor the deflator has been
published. Why the official index increases more
rapidly compared with the CIA index in somelperiods
than in others also is not evident. Differences in
1’ Gertrude E. Schroeder in Treml and Hardt, pp. 304-307.
“ The most complete description of how real incomes apparently are
calculated is given in USSR Gosplan, Metodicheskiye ukazaniya k
razrabotke gosudarstvennogo plana razviliya narodnogo kha-
zyaystva SSSR, Moscow, 1969, pp. 499-505. (Hereafter referred to
as Metodicheskiye ukazaniya.)
coverage may be part of the explanation, for the CIA
index includes personnel services in education, health
and other services, which apparently grow more slow-
ly than materials used in these sectors. The main
reason however, seems to lie in the faulty price index
used in the Soviet index to deflate current expendi-
tures and imputed depreciation. The CIA index, in
contrast, attempts to measure real quantities of goods
and services consumed. Comparison of this index with
an index in current prices provides an implied mea-
sure of price inflation.
Other Western Measures
Only two Western measures of Soviet real consump-
tion are available for comparison with the CIA index-
es—one calculated by Janet Chapman 2‘ for the peri-
od 1950-58 and one calculated by Abraham Becker 2°
for the period 1958-64. The construction of both of
these series begins with estimates of consumption
constructed in current prices. The sub-categories of
consumption are then deflated by price indexes of one
kind or another. Both measures follow concepts and
methodologies developed by Abram Bergson. The
Chapman index for 1955-58 and the Becker index, in
effect, employ Soviet official price deflators for goods
purchased at retail prices. The Chapman index for
1951-55 uses Bergson’s calculations for the period.”
The implicit Bergson-Chapman deflator gives nearly
the same rate of price change for the period as does a
weighted index of official indexes of prices in state
and cooperative stores and of prices on collective farm
markets.”“The Bergson-Chapman implicit price index
for 1955 (1950= I00) is 78.0,” the combined official
price index is 77.6 or 76.7, with 1950 and 1955
weights, respectively. .
With respect to the other components, matters are
more complex. In general, the Bergson and Becker
indexes (1) value consumption in kind, housing, and
personal services in physical quantities in constant
sets of prices (2) deflate the wage component of
expenditures on health and education by an index of
wages and (3) deflate nonlabor expenditures on health
and education by composite deflators compiled from
various sources (Bergson; Becker elected not to deflate
such expenditures.) The Chapman index for 1956-58
1‘ Janet G. Chapman, Ioc. cil., in 1
above.
1° Abraham Becker, I00. cit.. in "
above.
2’ Bergson, 1961, pp. 307-308.
2” Narkhoz I958. pp. 699, 771, 787.
2° Bergson, 1961, pp. 46, 85.
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Approved for Release: 2019/07/19 C05210421