Economic Measurement Initiative

Our vision

The appropriate measurement of economic variables is of high importance as such data are used by a wide range of researchers and policy makers, spanning the social sciences, humanities and the physical sciences. The research undertaken by the Economic Measurement Initiative is dedicated to improving measurement techniques to more accurately reveal empirical facts, thus better informing policy decisions.

Objectives of the initiative

The Initiative seeks to develop and apply advanced and innovative tools from economic theory, econometrics, aggregation theory, experimental economics, mathematics and statistics, to address key policy-relevant measurement issues. Through academic excellence it aims to have global impact, utilising extensive international networks, while developing links with key government stakeholders to advance social engagement.

Areas of research

Performance measurement
Inflation measurement
Index number theory
Functional form specification and
Measurement issues in international comparisons

CAER research is having real world impact:

From the December 2017 quarter, the Australian Bureau of Statistics implemented methodological changes to maximise the use of transactions data to compile the CPI. This has come about as a result of UNSW-based research, conducted with the financial support of the Australian Research Council through the Linkage Grants program, in collaboration with the ABS and Statistics Netherlands. For further details, see the following and references therein:
ABS (2017), “An implementation plan to maximise the use of transactions data in the CPI,” Information Paper 6401.0.60.004, Australian Bureau of Statistics, Canberra.

From the September 2014 quarter, Statistics New Zealand incorporated retail transactions data into the Consumer Price Index (CPI). The method is a variant of that originally proposed by EMI group members. For further details, see the following, and references therein: Krsinich, F. (2015), “Implementation of Consumer Electronics Scanner Data in the New Zealand CPI,” Statistics New Zealand. Paper presented at the New Zealand Association of Economists conference, Wellington, New Zealand, 3 July.

Publications

Diewert,W.E. and K.J. Fox, 2019, “The Diﬀerence Approach to Productivity Measurement and Exact Indicators", in C. Parmeter and R.C. Sickles (eds.),Methodological Contributions to the Advancement of Productivity and Efficiency Analysis”, Springer Proceedings in Business and Economics, New York: Springer, forthcoming.

Diewert,W.E. and K.J. Fox, 2019, “Productivity Indexes and National Statistics: Theory, Methods and Challenges", in W. Greene and T. ten Raa (eds.), The Palgrave Handbook of Economic Performance Analysis, Palgrave Macmillian, Chapter 18.

W.E. Diewert; Fox KJ, 2018, “Decomposing Value Added Growth into Explanatory Factors,” in E. Grifell-Tatjé, C.A.K. Lovell and R. Sickles (eds.), The Oxford Handbook of Productivity Analysis, Oxford University Press: New York, NY, 2018, Chapter 19, 625–662.

W.E. Diewert; Fox KJ, 2018, “Alternative User Costs, Productivity and Inequality in US Business Sectors,” in W.H. Greene, L.A. Khalaf, P. Makdissi, R. Sickles, and M-C. Voia (eds.), Productivity and Inequality, Springer, 2018, Chapter 2, 21–69.

Diewert,W.E. and K.J. Fox, 2017, “Alternative User Costs, Productivity and Inequality in US Business Sectors”, in Productivity and Inequality, W.H. Greene, L.A. Khalaf, P. Makdissi, R. Sickles, and M-C. Voia (eds.), Springer.
W.E. Diewert; Fox KJ, 2018, “A Decomposition of U.S. Business Sector TFP Growth into Technical Progress and Cost Efficiency Components," Journal of Productivity Analysis 50, 71{84, 2018}.

W.E. Diewert; Fox KJ, 2018, "Addendum to Output Growth and Inflation Across Space and Time," EURONA Eurostat Review on National Accounts and Macroeconomic Indicators, Issue No 2/2018, 71{80, 2018}.

W.E. Diewert; Fox KJ, 2018, ‘Alternative User Costs, Productivity and Inequality in US Business Sectors’ in W.H. Greene, L.A. Khalaf, P. Makdissi, R. Sickles, and M-C. Voia (eds.), Productivity and Inequality, Springer, 21–69.

Fox KJ, 2018, 'The ET Interview: Professor W. Erwin Diewert’ Econometric Theory 34, pp. 509-542.

Fox KJ, 2018, 'What Do We Know About the Productivity Slowdown? Evidence from Australian Industry Data' International Productivity Monitor, pp. 149 – 156.

Diewert, W.E. and ;K.J. Fox, 2017, "Decomposing Productivity Indexes into Explanatory Factors", European Journal of Operational Research, Vol. 256 (1), pp. 275–291.

Elnasri, A. and K.J. Fox, 2017, "The Contribution of Research and Innovation to Productivity", Journal of Productivity Analysis, Vol. 47 (3), pp. 291–308.

Diewert, W.E. and K.J. Fox, 2017, "Output Growth and Inflation across Space and Time", Eurostat Review on National Accounts and Macroeconomic Indicators (EURONA), Issue No 1, pp. 7-40.

Diewert, W.E., K.J. Fox and J. de Haan, 2016, "A Newly Identified Source of Potential CPI Bias: Weekly versus monthly unit value price indexes," Economics Letters, Vol. 141, pp. 169-172.

Barnett, W.A., W.E. Diewert and E. Maasoumi, 2016, "Innovations in measurement in economics and econometrics: An overview," Journal of Econometrics, Vol. 191(2), pp. 273-275.

Fox, K.J. and I.A. Syed, 2016, "Price Discounts and the Measurement of Inflation," Journal of Econometrics, Vol. 191(2), pp. 398-406.

Diewert, W.E., 2015, "Reconciling Gross Output TFP Growth with Value Added TFP Growth", International Productivity Monitor, Vol. 29, pp. 60–67.

Diewert, W.E., 2015, "Decompositions of productivity growth into sectoral effects", Journal of Productivity Analysis, Vol. 43, pp. 367-387.

Elnasri, A. and K.J. Fox, 2015, "R&D, Innovation and Productivity: The Role of Public Support", KDI Journal of Economic Policy, Vol. 37, pp. 73-96.

Diewert, W.E., 2014, "Decompositions of Profitability Change using Cost Functions", Journal of Econometrics, Vol. 183, pp. 58-66.

Diewert, W.E., 2014, "The Treatment of Financial Transactions in the SNA: A User Cost Approach", Eurostat Review of National Accounts and Macroeconomic Indicators, Vol. I, pp. 73–89.

Diewert, W.E., 2014, "US TFP growth and the contribution of changes in export and import prices to real income growth", Journal of Productivity Analysis, Vol. 41, pp. 19-39.

Diewert, W.E. and K.J. Fox, 2014, "Reference technology sets, Free Disposal Hulls and productivity decompositions", Economics Letters, Vol. 122, pp. 238-242.

Fox, K.J. and D. Melser, 2014, "Non-linear pricing and price indexes: Evidence and implications from scanner data", Review of Income and Wealth, Vol. 60, pp. 261-278.

Hill, R.J. and I.A. Syed, 2014, "Improving International Comparisons of Prices at Basic Heading Level: An Application to the Asia-Pacific Region", Review of Income and Wealth, Vol 61, pp. 515-539.
W.E. Diewert; Fox KJ, 2018, “Substitution Bias in Multilateral Methods for CPI Construction Using Scanner Data,” UNSW Business School Research Paper No. 2018-13.

Diewert, WE; Fox KJ, Schreyer P, 2018, "The Digital Economy, New Products and Consumer Welfare", ESCoE Discussion Paper 18-16.

Fox, K.J., 2017, "Editor's Introduction to the Special Issue of The Review of Income and Wealth on 'Productivity Measurement, Drivers and Trends' IARIW-UNSW Special Conference, Sydney, 26–27 November 2013," Review of Income and Wealth, Vol. 63 (S1), pp. S1-S6.

Fox, K.J., 2018, "The ET Interview: Professor W. Erwin Diewert," Econometric Theory 34, 509–542, 2018.

Diewert, W.E. and K.J. Fox, 2017, "Decomposing Value-Added Growth into Explanatory Factors", a paper presented at the 15th EWEPA Conference, hosted by the School of Business and Economics, Loughborough University and its Centre for Productivity and Performance, June 2017, London, UK. The paper was also presented at the Society for Economic Measurement Conference, July 2017, Boston.

Diewert, W.E. and K.J. Fox, 2017, "The Digital Economy, GDP and Consumer Welfare," a paper presented at the NBER Summer Institute, NBER/CRIW Workshop, Boston, July 2017.

Diewert, W.E. and K.J. Fox, 2017, "The demand for money balances and the measurement of productivity," a paper presented at the Bank of England Conference on "Financial Services Indices, Liquidity and Economic Activity" in honour of Oswald Distinguished Professor William A. Barnett, London, May 2017.

Diewert, W.E. and K.J. Fox, 2017, "Substitution Bias in Multilateral Methods for CPI Construction using Scanner Data," a paper presented at the Seminar Series of the Department of Economics, College of the Liberal Arts, Pennsylvania State University, May 2017 and at the Society for Economic Measurement Conference, July 2017, Boston.

Fox, K.J., 2017, "Natural Resources and Ecosystem Services in Productivity Measurement," presentation at the Montréal Environment and Resource Economics Workshop, hosted jointly by the departments of economics of the universities of Montréal, Québec à Montréal, McGill and HEC Montréal, May 2017.

Diewert, W.E. and K.J. Fox, 2016, "The User Cost of Non-renewable Resources and Green Accounting," a paper presented at the international workshop on "Environmentally Adjusted Productivity and Efficiency Measurement", University of Sydney, February 2016, and at the NBER Summer Institute, NBER/CRIW Workshop, Boston, July 2016.

Diewert, W.E. and K.J. Fox, 2016, "Decomposing Value-Added Growth over Sectors into Explanatory Factors," a paper presented at the Society for Economic Measurement Conference, July 2016, Thessaloniki and at UNSW Business School, School of Economics' seminar series, October 2016.

Diewert, W.E. and K.J. Fox, 2016, "Alternative User Costs, Rates of Return and TFP Growth Rates for the US Nonfinancial Corporate and Noncorporate Business Sectors: 1960-2014," UBC Discussion Paper 16-03. Presented at the Society for Economic Measurement Conference, July 2016, Thessaloniki.

Diewert, W.E. and K.J. Fox, 2016, "A Decomposition of U.S. Business Sector TFP Growth into Technical Progress and Cost Efficiency Components," UBC Discussion Paper 16-04. Presented at the Society for Economic Measurement Conference, July 2016, Thessaloniki.

Diewert, W.E. and K.J. Fox, 2016, "The Digital Economy, GDP and Consumer Welfare," a paper presented at the EMG Workshop, December 2016, UNSW, Sydney.

Diewert, W.E. and K.J. Fox, 2016, "Money and the Measurement of Total Factor Productivity", a paper presented at the School of Economics' seminar series, University of Queensland, June 2016.

Diewert, W.E. and K.J. Fox, 2015, "Output Growth and Inflation Across Space and Time", Discussion Paper 2015-04, School of Economics, UNSW. The paper was presented at the 11th Econometric Society World Congress Conference, August 2015, Montreal.

Diewert, W.E. and K.J. Fox, 2015, "Money and the Measurement of Total Factor Productivity", a paper presented at the IARIW-OECD Conference on "W(h)ither the SNA?", April 2015, Paris; and at the UNSW School of Economics seminar series, October 2015.

Diewert, W.E., K.J. Fox and J. de Haan, 2015, "Weekly versus Monthly Unit Value Price Indexes", Discussion Paper 2015-15, School of Economics, UNSW.

Diewert, W.E. and K.J. Fox, 2015, "Decomposing Productivity Indexes into Explanatory Factors", unpublished manuscript, submitted.

Diewert, W.E. and K.J. Fox, 2015, "The User Cost of Non-renewable Resources and Green Accounting", a paper presented at the Society for Economic Measurement Conference, July 2015, Paris.

Bunting, D. and K.J. Fox, 2014, "The Impact of Quarantine Policies on the Quality of Imports", Discussion Paper 2014-01, School of Economics, UNSW.

Elnasri, A. and K.J. Fox, 2014, "The Contribution of Research and Innovation to Productivity and Economic Growth", Discussion Paper 2014-08, School of Economics, UNSW.

Fox, K.J. and I.A. Syed, 2014, "Price Discounts and the Measurement of Inflation", Discussion Paper 2014-05, School of Economics, UNSW.

Diewert, W.E. and K.J. Fox, 2014, "Decomposing Bjurek Productivity Indexes into Explanatory Factors", Discussion Paper 14-07, School of Economics, University of British Columbia.

Schwartz, C., W.E. Diewert and K.J. Fox, 2014, "Consumer Benefits of Infrastructure Services", Discussion Paper 2014-07, School of Economics, UNSW.

Grants

Australian Research Council Discovery Grant, $320,000 (2017-2019), “Natural Resources and Ecosystem Services in Productivity Measurement”, investigators: K.J. Fox, Q. Grafton, C. Obst and W.E. Diewert. The project aims to significantly advance the understanding of sources of productivity growth through addressing theoretical and practical problems in the economics of natural resources and ecosystem services. Theory and practice for aggregate, regional and industry level analysis are planned to be developed with the goal of better informing environmental, innovation and industry policy.

Australian Research Council Discovery Grant, $551,400 (2015-2019), “Productivity Measurement, Drivers and Trends: A New Analytical Framework”, investigators: K.J. Fox and W.E. Diewert. The project aims to advance new concepts and methods for productivity measurement that have the potential to improve policy and national welfare, with special attention to: productivity in the mining industry, the increased holding of precautionary cash balances by firms during financial crises, innovative examination of firm productivity dynamics, and a more realistic approach to capitalisation of research and development and other intangible investments.

Education & training

ECON4309 / ECON6309 Economic Measurement

This course covers the theory and practice of economic measurement, including the measurement of key economic indicators such as the Consumer Price Index, Gross Domestic Product and productivity growth. Approaches employed by international statistical agencies will be highlighted, along with the possibility that policy implications are often reliant on the choice of measurement techniques. The course will be technically rigorous, particularly in the use of microeconomic theory and econometric analysis and will draw on the latest international research developments.

External engagement

Visitors hosted

Rebecca Riley (UK Economic Statistics Centre of Excellence), December 2019
Dr. Paul Schreyer, OECD, December 2019
Professor Jan de Haan, Statistics Netherlands, December 2019
Carl Obst (Institute for Development of Environmental-Economic Accounting), December 2019
Dr. Paul Schreyer, OECD, December 2018
Professor Jan de Haan, Statistics Netherlands and Delft University of Technology, December 2018
Dr. Paul Schreyer, OECD, December 2017
Professor Jan de Haan, Statistics Netherlands and Delft University of Technology, January to December 2017
Professor Prasada Rao, University of Queensland, December 2016
Dr Paul Schreyer, OECD, December 2016
Professor Jan de Haan, Statistics Netherlands and Delft University of Technology, June 2016
Carl Obst, University of Melbourne, December 2015
Professor Ulrich Kohli, University of Geneva, December 2015
Daniela Scur, Centre for Economic Performance, London School of Economics, October 2015
Professor Chad Syverson, Booth School of Business, University of Chicago, March 2015
Professor Jan de Haan, Statistics Netherlands & Delft University of Technology, December 2014
Professor Ulrich Kohli, University of Geneva, December 2014
Dr Paul Schreyer, Deputy Director of Statistics, OECD, December 2014
Dr Alice Shiu, The Hong Kong Polytechnic University, August 2014

Associated industry bodies

Australian Bureau of Statistics
Reserve Bank of Australia
The Australian Treasury

News

CAER Economic Measurement Initiative research on inflation measurement in the time of Covid has had a real world impact as acknowledged by
- the United Nations: https://unece.org/info/Statistics/pub/359134
- the Australian Bureau of Statistics: https://www.abs.gov.au/articles/methods-changes-during-covid-19-period#measuring-the-consumer-price-index-during-a-time-of-covid-19 (Footnote 1 and Appendix 1)

Fox K, 2021, "Is the inflation dragon coming back?". The Economist. July 2021

Diewert E; Fox K, 2020, "Can Inflation be Accurately Measured During a Lockdown?", IZA World of Labour, May 2020.

Fox K; Diewert E, 2020, "How to Produce a Meaningful CPI during COVID-19 Lockdown", Business Think, May 2020.

Fox K, 2019, “How to measure the value of free in the digital economy”, Business Think, September 2019.

Fox K, 2017, “Transactions data: a smarter method for measuring inflation”, Business Think, October 2017.

Fox K, 2014, “Where is the productivity benefit in R&D tax credits?”, Business Think, October 2014.

Economic Measurement Group workshops

7 December 2016 - Workshop outcomes being implemented in New Zealand and Europe.
Proposals on measuring data and CPI (consumer price index) discussed at the annual Economic Measurement Initiative are now being implemented in New Zealand and the Netherlands.

30 November 2015 – Economic measurement initiative considers output and income growth.
“How should output growth and inflation be measured across Space and Time?” asks UNSW Business School’s Professor Erwin Diewert.

3 December 2014 – Economic Measurement Group to examine real estate supply.
"Is there elasticity in the NSW housing supply?" is one of the leading questions of the fourteenth annual workshop of the Economic Measurement group which this year has several papers examining real estate.

25 November 2013 – Economic Measurement Group to examine high tech themes.
"Is the Information Technology Revolution Over?" is one of the leading talking points of the thirteenth annual workshop of the Economic Measurement Group (EMG), which this year has a strong high-tech theme.

19 October 2012 - Economics symposium celebrates distinguished career of Emeritus Professor John Nevile.
The distinguished career of Emeritus Professor John Nevile was recently celebrated at a high level symposium at the Australian School of Business. The symposium, which explored emerging issues and ground breaking new research, looked back at Professor Nevile's life and his contribution to Australian economics and public policy. Notable international and Australian economists from academic and public policy circles and the financial markets participated in the symposium to honour Professor Nevile's work.

Research team

Professor Kevin Fox – School of Economics, UNSW
Professor Erwin Diewert – School of Economics, UNSW and Vancouver School of Economics, the University of British Columbia
Associate Professor Glenn Otto – School of Economics, UNSW
Professor Quentin Grafton, opens in a new window – Australian National University
Carl. Obst, opens in a new window – Director, Development of Environmental-Economic Accounting (IDEEA)

Contact us

Professor Kevin Fox
Phone: +61 2 9385 3320
Email: caer@unsw.edu.au

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