TITLE

A Chain-Type Price Index for New Business Jet Aircraft

AUTHOR(S)
Cho, Dong W.
PUB. DATE
January 2006
SOURCE
Business Economics;Jan2006, Vol. 41 Issue 1, p45
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper presents a price index constructed to measure the real price and real output of corporate business jet aircraft. It employs a chained price index methodology to properly account for the effect of changes in aircraft quality and product lines on the price index. The index indicates that the average price level of corporate jets has significantly outpaced the general price level measured by the GDP deflator, nearly doubling the real price of the product over a 35-year period from 1968 to 2003, which could have negatively affected the demand for the product. Because the GDP deflator significantly understates the price increase in corporate jets, the industry's real output is overstated when its nominal sales are deflated with a general price index. The paper suggests that an industry-specific price index allows more accurate analyses of real economic activity of an industry. The methodology used in this paper could be useful for other industries where product price movements vary significantly from the changes in the general price level.
ACCESSION #
19836320

 

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics