EMPIRICAL STUDIES OF DEPRECIATION

Abstract

This paper surveys empirical research on depreciation based on an econometric model of asset prices introduced by Hall in 1971 and shows how Hall's model provides a vehicle for unifying research on constant quality price indices and depreciation. An additional objective of the paper is to illustrate the use of this research in constructing an integrated system of income, product, and wealth accounts. A system of vintage accounts, like that originated by Christensen and Jorgenson in 1973, is the key to successful integration.