Capital Stock, Capital Services and the Use of Fuel Consumption Proxies: An Appraisal

Derek L. Bosworth
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Derek L. Bosworth: Loughborough University of Technology

Chapter 10 in The Measurement of Capital, 1979, pp 246-261 from Palgrave Macmillan

Abstract: Abstract It has become fashionable in the recent economic literature to use electricity data as proxy for the consumption of capital services. Taylor (1967), for example, reported a high correlation across regions of the UK between electricity consumption and the stock of active capital. Heathfield (1972) has compared the consumption of electricity with the stock of capital in an attempt to derive measures of capital usage. Heathfield adopted the book value of the capital stock as a measure of the potential supply of capital services. More recently still, Moody (1974) and Bosworth (1974, 1976) have estimated neoclassical production functions using fuel proxies for the capital input. After comparing the results of using a traditional measure of the capital input with those of a proxy variable, Moody was able to conclude that electricity consumption was a better measure of the capital input than the book value of the capital stock.

Keywords: Machine Tool; Fuel Consumption; Capital Stock; Electricity Consumption; Capital Input (search for similar items in EconPapers)
Date: 1979
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DOI: 10.1007/978-1-349-04127-5_11

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