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

Approved for Release: 2019/07/19 C05210421
index includes furniture, household appliances, radios
and TV sets, passenger cars, sports equipment, toys,
musical instruments, dishwares, motorcycles and bi-
cycles, watches and jewelry, and a variety of odds and
ends not specifically identified in the published data
on retail sales. The statistics are not detailed enough
to permit an accurate matching of the US classifica-
tion of goods into consumer durables and consumer
nondurables. Nonetheless, the classification used here
for the USSR-durables and miscellaneous goods—
consists mainly (at least four-fifths) of items classified
as durable goods in US national accounts.
The index for durables and miscellaneous goods is
based on a deflation of total retail sales of such goods;
it is not a sample index. Unfortunately, the coverage
of the index is not identical with that of the 1970
value weight, which is used to move the index, but this
discrepancy is not thought to be serious. With the
detail available, it is not possible to provide an exact l
match. The coverage of the weight and the index
overlap by at least 80 percent. The items implicitly
covered by the index, but not by the weight, are repair
services for autos and household durables, building
materials, a variety of goods of unknown composition
included in a residual category in Soviet retail sales
data, and retail purchases made by state enterprises
and organizations.
The index based on the deflation of total retail sales of
durables and miscellaneous goods employs current
price values and an implicit official retail price index
as a deflator. Despite the reservations already noted
about the reliability of official retail price indexes, no
better approach to constructing the index could be
devised, given the paucity of data available. The
deflated sales approach replaced a method based on a
sample of nine product groups, some measured by
production or sales in physical units and some based
on retail sales. This sample, severely limited by the
availability of Soviet data, was seriously unrepresen-
tative. It was dominated by a group of goods—
furniture, household appliances, radio and TV sets
and automobiles—that increased very rapidly from
very low levels; these rapidly growing items made up
over two-thirds of the weight. Analysis of retail sales
data showed that the rest of the goods covered by the
weight were increasing much less rapidly. The unre-
liability of the sample index also was indicated by the
fact that its rate of growth was far higher than an
official production series in constant rubles labeled
“Proizvodstvo tovarov kul’turno-bytovogo naznachen-
iya i khozyaystvennogo ob’ikhoda,” (cultural and
household goods hereafter referred to as tovary),
which evidently includes most of the goods involved.
This value series itself is probably biased upward,
because of unreliable price deflators. Lack of data
precluded expansion of the sample to make it more
representative.
The present index based on deflated retail sales,
unlike physical value and production based indexes,
incorporates imported goods and reflects changes in
product mix and quality. On the other hand, it is
probably biased upward, because of the flaws in
official price indexes. Disguised price inflation may be
serious for durable goods, but there is no way to
estimate the degree of bias. The index can be com-
pared with two other measures with similar (though
not identical) coverage. One is the official Soviet
series for the production of household durables and
related items mentioned above. The series in constant
rubles (tovary) is believed to include automobiles and
to be distorted by changing coverage.” The other
index is a composite of the CIA indexes for produc-
tion of consumer durables and furniture, weighted by
estimated value of retail sales for the two components
in 1970. These indexes, components of the CIA index
of Soviet industrial production, include passenger cars
The coverage of the tovary series is not entirely clear. The
Narkhozy regularly provide data, mainly in physical units, for a list
of the “basic” kinds of goods included. Clearly, it includes household
appliances, radio and TV sets, musical instruments, motorcycles and
bicycles, furniture, household chemicals, dishware and many other
products. A key question is whether it includes passenger cars.
Although not absolutely certain, the weight of the evidence suggests
that it does. lt is also probable that the coverage of the series has
been expanding. Both conclusions are supported by a lengthy
discussion of the tovary complex of goods in R. A. Lokshin, Spros,
pmizvodslvo torgovlya, Moscow, 1975, pp. 185-216. Other evidence
for the belief that automobiles are included is provided by
comparisons of growth rates for production of tovary during I971-75
with (l) growth rates for all components listed as included (Narkhoz
I975, pp. 294-295) and (2) growth rates for retail sales in constant
prices of all identified components for which such series are
available. Among the production series, all those with large weights
increased much less rapidly than tovary as a Whole. A similar
situation prevailed for the retail trade series. Finally, retail sales of
identified tovary (less furniture) in current prices rose by 44 percent
during 1971-75, residual retail sales of non-food goods, which
include cars, increased by 128 percent, and production of tovary
(including furniture) increased 64.5 percent. From what is known
about relative values of the various components, it is hard to account
for such a fast growth rate unless cars were included.
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Approved for Release: 2019/07/19 C05210421