Measuring Irish Capital

Irish National Income and Expenditure Accounts do not contain information on capital stocks or capital services estimation. Estimates of the national capital stock and the depreciation of its fixed assets are basic macroeconomic aggregates and are integral components for many modelling exercises. This paper presents a detailed asset-level analysis of the stocks and depreciation of Irish fixed assets and the capital formation flows used to derive them. It applies an improved perpetual inventory methodology for calculating depreciation based on best practice employed for the US National Income and Product Accounts (NIPA). The paper shows how the three basic capital variables – the net capital stock, consumption of fixed capital and capital services – are linked through a standard equation for the value of an asset. The paper then presents estimates of the volume of capital services for the Irish economy as well as by asset type. The volume index of capital services (VICS) weights together the growth in the net stock of assets using shares that reflect the relative productivity of the different assets that make up the capital stock i.e. without controlling for the share of housing in the capital stock, total factor productivity will be overestimated for growth accounting purposes.

Adjusting for Quality of Labour and Labour Services in Productivity Measurement

Evaluating the true level of factor inputs (such as labour and capital) is an essential component of estimating an economy’s productive potential. The standard measure of the total economy’s labour input is to aggregate the number of people employed. A related measure of labour inputs is to aggregate the number of hours worked by each person in the economy. Both of these labour measures assume that all workers in the economy are equally productive. This paper is concerned with achieving a more accurate measure of the total labour input in the economy by adjusting standard labour indicators for labour quality.

A Quality Adjusted Measure of Labour Services for Ireland

This paper presents annual indices of labour input adjusted for the age, education and gender distributions of the Irish workforce for the period 1999-2008. Growth in labour services is divided between the increase in hours and improvement in the productive quality of these hours. Improvement in labour quality, as proxied by education, age and gender, has added on average 0.7 percentage points per year to the growth rate in total labour input. Changes in education account for two-thirds of the improvement in labour quality, with gender and age distributions equally sharing the remaining third. Even in the face of declining total employment, growth in labour services remained positive in 2008 due to past investment in human capital. A key application of this quality-adjusted labour series is that a proportion of growth usually attributed to total factor productivity growth can now be accounted for as an improvement in the quality of labour input.

Financial Capability:New Evidence for Ireland

Recent increases in financial innovation, particularly in the Anglo-Saxon banking culture, have seen a considerable growth in the amount of financial products available to the general public. Simultaneously, many workers are increasingly assuming responsibility for planning for their future pensions. This allied to increased life expectancy necessitates a greater degree of financial capability amongst the general public. This study has empirically examined this issue for the first time in an Irish context. As such, this report follows a nascent literature internationally. The related issue of financial literacy has been studied for several years in the US while a major study of financial capability was completed in the UK in 2006. This report follows that UK study closely. This is the first major evidence on financial capability inIreland, conducted with a purpose-designed, in-depth, representative survey of just over 1,500 people.

Wage Setting and Wage Flexibility in Ireland:Results from a Firm-level Survey

This paper investigates the wage-setting behaviour of Irish firms. We place particular emphasis on the use of flexible pay components and examine how these allow firms to deal with shocks requiring a reduction in costs without having to cut base wages. The results presented in this paper are based on a survey of Irish firms undertaken as part of the Wage Dynamics Network (WDN), which is a Euro-system research network. Our main findings are that almost two-thirds of firms applied at least some elements of the national wage agreement in place at the time of the survey (Towards 2016). Wage cuts or freezes were reported by a very small percentage of firms but changes in bonuses and other flexible pay components were relatively common if the firm needed to reduce labour costs. When asked about the relevance of different explanations for avoiding cuts in base wages, worker morale and loss of experienced workers were the main concerns. Regulatory or collective bargaining obstacles to wage cuts were the lowest ranked.

How Do Firms Set Prices? Survey Evidence from Ireland

Despite the importance of understanding and estimating the “stickiness” of prices of goods and services, empirical assessment of price setting behaviour by firms has remained relatively limited. This is the first paper to provide detailed information on the pressures, manner and frequency with which Irish firms adjust their output prices. Using survey information from almost a thousand Irish firms, we present a number of stylised facts on price setting behaviour. One of the first of these relates to the level of control firms have over their pricing strategy – the most common approach for firms is to set a price based on costs and a self-determined profit margin. However, one-third of firms said that their price was set primarily by following that of their closest competitors. The perceived intensity of competition was found to be one of the most significant factors in determining the price-setting approach and is also a central factor in determining price changes

Using Satellite Image Analysis for Locating Prehistoric Archaeological Sites in Alaska\u27s Central Brooks Range

In this pilot study, we apply satellite image analysis to archaeological site prospection in Alaska\u27s Brooks Range. Our goal was to test whether satellite remote sensing, which has been successful in locating large archaeological features associated with sedentary peoples, could be applied to arctic interior sites associated with mobile hunter–gatherers. In particular, we strove to develop a relatively straightforward and inexpensive model using existing data which could be used to help guide archaeology surveys. Using 1-m resolution IKONOS imagery of Lake Matcharak along the upper Noatak River, we produced a Normalized Difference Vegetation Index (NDVI) and tasseled cap transformation of the study area and stacked these five vegetation indices into one image. We then applied unsupervised and supervised classifications to the image first, to test for the presence of a site-specific spectral class and second, determine the nature of that class. Through a visual analysis of the unsupervised classification, a spectral phenomenon was seen to co-occur with archaeological sites in the study area. The supervised classification provided a high-resolution land cover map used to identify the signature as the ecotone between un-vegetated sediments and dense willow (Salix sp.) stands. Dense willow stands along the Lake Matcharak shore visually correlate with most of the known archaeological sites, possibly reflecting landform and/or vegetation characteristics thatwould have appealed to past inhabitants. The methods described here could contribute to building better survey strategies and archaeological predictive models for elsewhere in the Brooks Range and Alaska

Measuring Irish Capital

Irish National Income and Expenditure Accounts do not contain information on capital stocks or capital services estimation. Estimates of the national capital stock and the depreciation of its fixed assets are basic macroeconomic aggregates and are integral components for many modelling exercises. This paper will present a detailed asset-level analysis of the stocks and depreciation of Irish fixed assets and the capital formation flows used to derive them. It will apply an improved perpetual inventory methodology for calculating depreciation based on best practice employed for the US National Income and Product Accounts (NIPA). The paper shows how the three basic capital variables – the net capital stock, consumption of fixed capital and capital services – are linked through a standard equation for the value of an asset. The paper then presents estimates of the volume of capital services for the Irish economy as well as by asset type. The volume index of capital services (VICS) weights together the growth in the net stock of assets using shares that reflect the relative productivity of the different assets that make up the capital stock i.e. without controlling for the share of housing in the capital stock total factor productivity will be overestimated for growth accounting purposes.