[open-economics] open-economics Digest, Vol 30, Issue 3

Fri Jun 7 09:42:22 UTC 2013

Tryggvi, apologies for potentially missing something, but I'd like to help.

Can you share the data? I have an extensive background in econometrics.

Ulrich

On 7 June 2013 10:13, <open-economics-request at lists.okfn.org> wrote:

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> Today's Topics:
>
>    1. Financial comparisons (Tryggvi Bj?rgvinsson)
>    2. Re: Financial comparisons (Guo Xu)
>    3. Re: Financial comparisons (Niels Erik Kaaber Rasmussen)
>    4. Re: Financial comparisons (Tryggvi Bj?rgvinsson)
>    5. Re: Financial comparisons (Tryggvi Bj?rgvinsson)
>    6. Re: Financial comparisons (Niels Erik Kaaber Rasmussen)
>
>
> ----------------------------------------------------------------------
>
> Message: 1
> Date: Thu, 06 Jun 2013 15:39:57 +0000
> From: Tryggvi Bj?rgvinsson <tryggvi.bjorgvinsson at okfn.org>
> Subject: [open-economics] Financial comparisons
> To: open-economics at lists.okfn.org,      OpenSpending Discussion List
>         <openspending at lists.okfn.org>
> Message-ID: <51B0AD4D.40307 at okfn.org>
> Content-Type: text/plain; charset="iso-8859-1"
>
> Hi all and sorry for crossposting,
>
> I've been working on "amount normalisation" for OpenSpending to allow us
> to do historical comparisons more accurately using real value or look at
> amounts at the current nominal value (I hope I'm using the correct terms).
>
> I decided to use consumer price indexes and I've collected the data from
> the World Bank. The problem with that data is that many years are
> missing for some countries (either the CPI wasn't being collected, isn't
> being collected any more or has never been collected).
>
> Since I don't know how this is usually done I wanted to ask you what you
> think would be the best approach:
>
> 1. Use the index that's nearest in time (this won't be accurate though)
> 2. Interplolate and guess what the index is (not accurate either since
> it's not linear)
> 3. Just say that we can't do historical comparisons nor compute the
> real/nominal value
> 4. Something else
>
> --
>
> Tryggvi Bj?rgvinsson
>
> Technical Lead, OpenSpending
>
> The Open Knowledge Foundation <http://okfn.org>
>
> /Empowering through Open Knowledge/
>
> http://okfn.org/ | @okfn <http://twitter.com/OKFN> | OKF on Facebook
> <https://facebook.com/OKFNetwork> | Blog <http://blog.okfn.org/> |
> Newsletter <http://okfn.org/about/newsletter>
>
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> ------------------------------
>
> Message: 2
> Date: Thu, 6 Jun 2013 17:03:45 +0100
> From: Guo Xu <digitalepourpre at gmail.com>
> Subject: Re: [open-economics] Financial comparisons
> To: Tryggvi Bj?rgvinsson <tryggvi.bjorgvinsson at okfn.org>
> Cc: "open-economics at lists.okfn.org" <open-economics at lists.okfn.org>,
>         OpenSpending Discussion List <openspending at lists.okfn.org>
> Message-ID:
>         <
> CACzVpz_MPGZhaT1i+yQ_jJMzd_v1oj0hO6Omusd6j0HmL5AfTg at mail.gmail.com>
> Content-Type: text/plain; charset=ISO-8859-1
>
> Hi Tryggvi,
>
> How far do you want to go back?
>
> Calculating deflators is not trivial, particularly as baskets are
> different and keep changing over time! The standard source for CPI is
> from the Penn World Tables. This should give you data running back to
> 1950.
>
> https://pwt.sas.upenn.edu/php_site/pwt_index.php
>
> The variables of interest to you will be the p* variables that give
> the price levels.
>
> Guo
>
> On 6 June 2013 16:39, Tryggvi Bj?rgvinsson
> <tryggvi.bjorgvinsson at okfn.org> wrote:
> > Hi all and sorry for crossposting,
> >
> > I've been working on "amount normalisation" for OpenSpending to allow us
> to
> > do historical comparisons more accurately using real value or look at
> > amounts at the current nominal value (I hope I'm using the correct
> terms).
> >
> > I decided to use consumer price indexes and I've collected the data from
> the
> > World Bank. The problem with that data is that many years are missing for
> > some countries (either the CPI wasn't being collected, isn't being
> collected
> > any more or has never been collected).
> >
> > Since I don't know how this is usually done I wanted to ask you what you
> > think would be the best approach:
> >
> > 1. Use the index that's nearest in time (this won't be accurate though)
> > 2. Interplolate and guess what the index is (not accurate either since
> it's
> > not linear)
> > 3. Just say that we can't do historical comparisons nor compute the
> > real/nominal value
> > 4. Something else
> >
> > --
> >
> > Tryggvi Bj?rgvinsson
> >
> > Technical Lead, OpenSpending
> >
> > The Open Knowledge Foundation
> >
> > Empowering through Open Knowledge
> >
> > http://okfn.org/ | @okfn | OKF on Facebook | Blog | Newsletter
> >
> >
> > _______________________________________________
> > open-economics mailing list
> > open-economics at lists.okfn.org
> > http://lists.okfn.org/mailman/listinfo/open-economics
> > Unsubscribe: http://lists.okfn.org/mailman/options/open-economics
> >
>
>
>
> ------------------------------
>
> Message: 3
> Date: Thu, 06 Jun 2013 21:14:15 +0200
> From: Niels Erik Kaaber Rasmussen <niels at buhlrasmussen.eu>
> Subject: Re: [open-economics] Financial comparisons
> To: <open-economics at lists.okfn.org>
> Message-ID: <23eae014457d9417e4f0a48a5300485a at epdb.eu>
> Content-Type: text/plain; charset=UTF-8; format=flowed
>
> Hi
>
> I did consider this problem while presenting historical budgets and
> accounts for Danish municipalities (for charts see
> http://kommune.politiken.dk/tabel.php?kid=101&&type=ud). Even for a 7
> years period it's not fair to present the numbers in real values but how
> to adjust?
>
> There are multiple official price-indexes all used by government in
> different contexts: consumer-price index, a wage index, netto-prices, an
> index for construction, for road constructions and so on. Parts of the
> budgets are grouped in similar ways. Fx. construction expenses are
> identifiable and these expenses could be adjusted using the
> construction-price-index (same goes for salaries, road-construction
> etc.). This could be a reasonable approach when focusing on a specific
> expenditure post in a historic perspective. However to use different
> price-indexes on different parts of the same budget is obviously
> problematic because the relative size of each type of expenditure
> changes over time.
>
> I choose to use a combined consumer-price and wage index to adjust the
> historical data. This is not perfect but I found it better than using
> multiple indexes for different parts of the budget and better than
> presenting figures in real values.
>
> Best, Niels Erik
> ---
> http://www.buhlrasmussen.eu
> (+45) 2680 9492
>
> On 2013-06-06 18:03, Guo Xu wrote:
> > Hi Tryggvi,
> >
> > How far do you want to go back?
> >
> > Calculating deflators is not trivial, particularly as baskets are
> > different and keep changing over time! The standard source for CPI is
> > from the Penn World Tables. This should give you data running back to
> > 1950.
> >
> > https://pwt.sas.upenn.edu/php_site/pwt_index.php
> >
> > The variables of interest to you will be the p* variables that give
> > the price levels.
> >
> > Guo
> >
> > On 6 June 2013 16:39, Tryggvi Bj?rgvinsson
> > <tryggvi.bjorgvinsson at okfn.org> wrote:
> >> Hi all and sorry for crossposting,
> >>
> >> I've been working on "amount normalisation" for OpenSpending to
> >> allow us to
> >> do historical comparisons more accurately using real value or look
> >> at
> >> amounts at the current nominal value (I hope I'm using the correct
> >> terms).
> >>
> >> I decided to use consumer price indexes and I've collected the data
> >> from the
> >> World Bank. The problem with that data is that many years are
> >> missing for
> >> some countries (either the CPI wasn't being collected, isn't being
> >> collected
> >> any more or has never been collected).
> >>
> >> Since I don't know how this is usually done I wanted to ask you what
> >> you
> >> think would be the best approach:
> >>
> >> 1. Use the index that's nearest in time (this won't be accurate
> >> though)
> >> 2. Interplolate and guess what the index is (not accurate either
> >> since it's
> >> not linear)
> >> 3. Just say that we can't do historical comparisons nor compute the
> >> real/nominal value
> >> 4. Something else
> >>
> >> --
> >>
> >> Tryggvi Bj?rgvinsson
> >>
> >> Technical Lead, OpenSpending
> >>
> >> The Open Knowledge Foundation
> >>
> >> Empowering through Open Knowledge
> >>
> >> http://okfn.org/ | @okfn | OKF on Facebook | Blog | Newsletter
> >>
> >>
> >> _______________________________________________
> >> open-economics mailing list
> >> open-economics at lists.okfn.org
> >> http://lists.okfn.org/mailman/listinfo/open-economics
> >> Unsubscribe: http://lists.okfn.org/mailman/options/open-economics
> >>
> >
> > _______________________________________________
> > open-economics mailing list
> > open-economics at lists.okfn.org
> > http://lists.okfn.org/mailman/listinfo/open-economics
> > Unsubscribe: http://lists.okfn.org/mailman/options/open-economics
>
>
>
>
> ------------------------------
>
> Message: 4
> Date: Fri, 07 Jun 2013 08:33:40 +0000
> From: Tryggvi Bj?rgvinsson <tryggvi.bjorgvinsson at okfn.org>
> Subject: Re: [open-economics] Financial comparisons
> To: Guo Xu <digitalepourpre at gmail.com>
> Cc: "open-economics at lists.okfn.org" <open-economics at lists.okfn.org>,
>         OpenSpending Discussion List <openspending at lists.okfn.org>
> Message-ID: <51B19AE4.6010708 at okfn.org>
> Content-Type: text/plain; charset="iso-8859-1"
>
> Hi and thanks for the response,
>
> On fim 6.j?n 2013 16:03, Guo Xu wrote:
> > How far do you want to go back?
>
> The more data I can get the better.
>
> > Calculating deflators is not trivial, particularly as baskets are
> > different and keep changing over time! The standard source for CPI is
> > from the Penn World Tables. This should give you data running back to
> > 1950.
> >
> > https://pwt.sas.upenn.edu/php_site/pwt_index.php
>
> This is great. It goes further back for many countries than the World
> Bank dataset but it stops at 2010. So I'll still run into the problem of
> what to do for years when there is no data.
>
> --
>
> Tryggvi Bj?rgvinsson
>
> Technical Lead, OpenSpending
>
> The Open Knowledge Foundation <http://okfn.org>
>
> /Empowering through Open Knowledge/
>
> http://okfn.org/ | @okfn <http://twitter.com/OKFN> | OKF on Facebook
> <https://facebook.com/OKFNetwork> | Blog <http://blog.okfn.org/> |
> Newsletter <http://okfn.org/about/newsletter>
>
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> ------------------------------
>
> Message: 5
> Date: Fri, 07 Jun 2013 08:45:07 +0000
> From: Tryggvi Bj?rgvinsson <tryggvi.bjorgvinsson at okfn.org>
> Subject: Re: [open-economics] Financial comparisons
> To: open-economics at lists.okfn.org
> Message-ID: <51B19D93.3010302 at okfn.org>
> Content-Type: text/plain; charset="utf-8"
>
> Hi and thanks for the reply,
>
> On fim 6.j?n 2013 19:14, Niels Erik Kaaber Rasmussen wrote:
> > There are multiple official price-indexes all used by government in
> > different contexts: consumer-price index, a wage index, netto-prices,
> > an index for construction, for road constructions and so on. Parts of
> > the budgets are grouped in similar ways. Fx. construction expenses are
> > identifiable and these expenses could be adjusted using the
> > construction-price-index (same goes for salaries, road-construction
> > etc.). This could be a reasonable approach when focusing on a specific
> > expenditure post in a historic perspective. However to use different
> > price-indexes on different parts of the same budget is obviously
> > problematic because the relative size of each type of expenditure
> > changes over time.
>
> This brings up another problem of what index to use. I think we can only
> infer that from some of our data (not the majority).
>
> > I choose to use a combined consumer-price and wage index to adjust the
> > historical data. This is not perfect but I found it better than using
> > multiple indexes for different parts of the budget and better than
> > presenting figures in real values.
>
> How do you combine them and what do you do when you don't have the
> indices for the years your looking at?
>
> I don't want to present the amounts in real values (but I want to store
> the real values in the database), I want to present them in "current
> nominal value" (what it would cost if I were paying for it with today's
> money). The problem is that I don't have the data to compute the current
> nominal value (nor the data to compute the real value for all years).
>
> I'm really interested in knowing how you did this with the Danish
> municipalities.
>
> --
>
> Tryggvi Bj?rgvinsson
>
> Technical Lead, OpenSpending
>
> The Open Knowledge Foundation <http://okfn.org>
>
> /Empowering through Open Knowledge/
>
> http://okfn.org/ | @okfn <http://twitter.com/OKFN> | OKF on Facebook
> <https://facebook.com/OKFNetwork> | Blog <http://blog.okfn.org/> |
> Newsletter <http://okfn.org/about/newsletter>
>
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>
> ------------------------------
>
> Message: 6
> Date: Fri, 07 Jun 2013 11:13:00 +0200
> From: Niels Erik Kaaber Rasmussen <niels at buhlrasmussen.eu>
> Subject: Re: [open-economics] Financial comparisons
> To: <open-economics at lists.okfn.org>
> Message-ID: <d965d8dbbb4e6b5e7c3e7ec9cf8987dd at epdb.eu>
> Content-Type: text/plain; charset=UTF-8; format=flowed
>
> Hi
>
> On 2013-06-07 10:45, Tryggvi Bj?rgvinsson wrote:
> > Hi and thanks for the reply,
> >
> >  On fim 6.j?n 2013 19:14, Niels Erik Kaaber Rasmussen wrote:
> >
> >> There are multiple official price-indexes all used by government in
> >> different contexts: consumer-price index, a wage index, netto-prices,
> >> an index for construction, for road constructions and so on. Parts of
> >> the budgets are grouped in similar ways. Fx. construction expenses are
> >> identifiable and these expenses could be adjusted using the
> >> construction-price-index (same goes for salaries, road-construction
> >> etc.). This could be a reasonable approach when focusing on a specific
> >> expenditure post in a historic perspective. However to use different
> >> price-indexes on different parts of the same budget is obviously
> >> problematic because the relative size of each type of expenditure
> >> changes over time.
> >
> >  This brings up another problem of what index to use. I think we can
> > only infer that from some of our data (not the majority).
> >
> >> I choose to use a combined consumer-price and wage index to adjust
> >> the historical data. This is not perfect but I found it better than
> >> using multiple indexes for different parts of the budget and better
> >> than presenting figures in real values.
> >
> >  How do you combine them and what do you do when you don't have the
> > indices for the years your looking at?
>
> There was an existing official price-index base on a combination of
> consumer-prices and wages. As far as I know it is simply calculated as a
> weighted average of the consumer-price index and the wage-index.
>
> >  I don't want to present the amounts in real values (but I want to
> > store the real values in the database), I want to present them in
> > "current nominal value" (what it would cost if I were paying for it
> > with today's money).
>
> The same I tried to accomplish in order to make comparisons (a little
> more) reasonable.
>
> > The problem is that I don't have the data to
> > compute the current nominal value (nor the data to compute the real
> > value for all years).
>
> I understand now that this is your main problem. In the Danish case I
> had all the data available. My main concerns was choosing the best
> price-index; how to deal with changes in accounting practices; what
> exactly to define as municipal-level expenses (vs. state-level); and how
> to deal with the fact that municipal responsibilities are changing over
> time.
>
>
> /Niels Erik
> --
> http://www.buhlrasmussen.eu
> (+45) 2680 9492
>
>
>
> ------------------------------
>
> _______________________________________________
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>
> End of open-economics Digest, Vol 30, Issue 3
> *********************************************
>

-- 
*--
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