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

Approved for Release: 2019/07/19 C05210421
In making the calculations, allowance was made for a
change in classification in the 1960s. Parental fees
were added to total budget expenditures for
kindergartens.
(4) For the years 1976-80, data on total non-invest-
ment expenditures by major kind of school are given
in Narkhoz I980, p. 525. The percentage shares
obtained for 1975 in step (1) were used to calculate
values of total current purchases for those years.
(b) Price index
Other current purchases by educational institutions
encompass a wide variety of items. The largest cate-
gory is food (estimated from budget data at 47 percent
of the total in 1970). Other sizeable items are services
and miscellaneous outlays (25 percent), bedding and
uniforms (9 percent), and numerous items related to
utilities, office supplies, and housekeeping expenses
(l 5 percent). No satisfactory price index exists or can
be devised to deflate this mix of expenditures. Official
industrial wholesale price indexes are too highly ag-
gregated for categories other than food, and in any
event are of dubious reliability, as are also the official
indexes of retail prices.“ In the belief that some
deflation procedure, however crude, is preferable to
none, it was decided to adopt a deflator that is implicit
when the CIA index of household consumption of
purchased goods in constant prices is compared with
an index of retail sales of such goods in current prices
that can be calculated from official Soviet data. The
justification for employing this “alternative” index is
as follows: (I) the need for some kind of deflation is
recognized; (2) the implicit index is largely indepen-
dent of official price indexes; (3) from a comparison of
data in Vest stat, No. 5, 1971, pp. 34, 36 with
expenditure data in Gosbyudzhet I972, p. 94 it is
evident that schools, primarily kindergartens, pur-
chase nearly all their food in retail outlets, as well as
about one-third of all other material purchases.“
The implicit index—'shown in Appendix F—declines
by 13 percent during I951-55 and rises by 40 percent
during 1956-80; in contrast the implicit official price
index (state and collective farm market prices com-
bined) declines by 25 percent during 1951-55 and
‘° On this point, see Morris Bornstein in Treml and Hardt, 1972, pp.
355-395. -
" Separation of expenditures between material purchases and
services follows the approach used in M. R. Eidel’man Mezh0tras-
levoy balans obshchestvennogo produkta, Moscow, 1966, p. 165.
remains virtually unchanged thereafter. The interpre-
tation and limitations of the “alternative” price index
are discussed in JEC I976, pp. 631, 651. A revised
version of the index, along with a description of
sources and methodology, is given in JEC, 1979, p.
766. Despite its limitations, the “alternative” index is
believed to reflect price changes far more accurately
than the official index. Moreover, even the “alterna-
tive” index may be biased downward, because the
CIA index itself incorporates several sub-indexes
based on the value of retail sales in constant prices as
measured by official price indexes. The sub-index for
“durables and miscellaneous goods” is the most con-
spicuous example.
Health. Scope and Coverage. The sector is defined in
Soviet statistical practice to include all activities
concerned with public health—hospitals, clinics, sana-
toria, vacation resorts, homes for the aged and dis-
abled, and organizations concerned with social securi-
ty and physical culture. In constructing the index of
health services, expenditures on vacation resorts and
sports activities are removed. The definition, then,
corresponds, in the main, to the component “medical
care and expenses” in the US national accounts for
personal consumption expenditures plus government
expenditures on health and hospitals and on medical
vendor payments.
The index for health services is a weighted average of
sub-indexes for “personnel services” and for “other
current purchases”—mainly food, medical supplies,
utilities, and housekeeping and office expenses. The
underlying data are given in Appendix F. The nature
of the index is the same as that for “education”,
described above. The discussion there of the limita-
tions of such an index applies also to the index for
health. In constructing the weights for the index,
expenditures on physical culture and vacation resorts
were deducted; they are included in the sector “re-
creation.” Lack of detailed data prevented the re-
moval of workers in physical culture from the employ-
ment data underlying the indexes. However, their
share in total employment is small (5.2 percent in
1966): they are not included in the published outlays
for “health,” and therefore are omitted from the
index of other current purchases.
Weights. The sub-indexes are weighted by estimated
expenditures in 1970 on personnel services and on
materials and the like. The weights, revised from
those used in CIA, GNP I970, are described in
Appendix D of JEC, GNP, I950-80.
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