 MULTIPLICATIVE DECOMPOSITION AND INDEX NUMBER THEORY: AN EMPIRICAL APPLICATION OF THE SATO-VARTIA DECOMPOSITIONEconomic Systems Research, 2009, vol. 21, issue 2, 163-174 Abstract: In de Boer (2008), additive decompositions of aggregate changes in a variable into its factors were considered. We proposed using the 'ideal' Montgomery decomposition, developed in index number theory as an alternative to the commonly used methods in structural decomposition analysis, and applied it to the example analyzed by Dietzenbacher and Los (1998) (D&L). In this paper we consider multiplicative decompositions and show that the method proposed by D&L of taking the geometric mean of all elementary decompositions is 'ideal'. However, it requires the computation of an ever-increasing number of decompositions when the number of factors increases. As an alternative, we propose using the Sato-Vartia decomposition, which is also 'ideal', but requires the computation of only one decomposition. Application to the example of D&L reveals that the two methods yield results that are very close to each other. Keywords: Multiplicative decomposition; Index number theory; Structural decomposition analysis; Siegel-Shapley decomposition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:ecsysr:v:21:y:2009:i:2:p:163-174 Ordering information: This journal article can be ordered from DOI: 10.1080/09535310902937638 Access Statistics for this article Economic Systems Research is currently edited by Bart Los and Manfred Lenzen More articles in Economic Systems Research from Taylor & Francis Journals |
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