[open-economics] Financial comparisons

[Velichka Dimitrova]

Hi Triggi,

>> I want to present them in "current nominal value" (what it would cost if
I were paying for it with today's money).>>

I noticed there might be a confusion in terminology that you might want to
avoid:

"Current prices" means always the price of the designated year or no change
or nominal values

"Constant prices" means when you have chosen a base year - e.g. for
deflating GDP the Penn World Table uses 2005 as the base year, i.e. all the
data is expressed in terms of 2005

See e.g. Uses and Examples here:
http://en.wikipedia.org/wiki/Real_versus_nominal_value_(economics)

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Velichka Dimitrova

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On 7 June 2013 09:45, Tryggvi Björgvinsson <tryggvi.bjorgvinsson at okfn.org>wrote:

>  Hi and thanks for the reply,
>
>
> On fim 6.jún 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 Björgvinsson
>
> Technical Lead, OpenSpending
>
> The Open Knowledge Foundation <http://okfn.org>
>
> *Empowering through Open Knowledge*
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