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Capital Shallowness: A Problem for New Zealand? - WP 05/05

Appendix 3

The Gross Fixed Capital Formation (GFKF) series were obtained from the OECD national accounts. Data in the national accounts are on a calendar year basis for all OECD countries except Australia and New Zealand. Australian national account data is based on a June year, whereas New Zealand national account data is based on a March year.

The GDP data obtained from OLISnet were directly downloadable in real 1995 prices and US$ (converted using 1995 Purchasing Power Parities). The Gross Fixed Capital Formation data were available in real 1995 prices, from which we converted to US$ using 1995 Purchasing Power Parities (PPPs) available from the OECD website.

The hours data used for New Zealand from the Household Labour Force Survey (HLFS) (backdated by Chapelle-Mears) is quarterly average weekly hours worked. We multiplied the weekly hour’s data by 13 for each quarter and then summed over the four quarters to form annual total hours worked.

The housing GFKF series were obtained from the OECD national accounts and the mining and agriculture, forestry and fishing GFKF series were obtained from Statistics New Zealand and the Australian Bureau of Statistics. For the initial values of the housing GFKF, the Mining GFKF, and the Agriculture, Forestry and Fishing GFKF we have assumed the growth rate to be the same as for total GFKF for the two years prior to 1972 (as the housing GFKF only begins in 1972 for both Australia and New Zealand and the Mining and Agricultural GFKF series only begin in 1972 for New Zealand). For the mining GFKF and agricultural GFKF we only had data in current prices, so we deflated these series by the implicit total GFKF price indices (as the OECD has total GFKF in both current and constant prices in the national accounts). The new OECD capital stock data were also converted to real 1995 prices using this implicit GFKF price deflator. As the mining GFKF and agricultural GFKF series both stop in 2001 (for New Zealand), we assumed the growth rate to be the same as for total GFKF in 2002.

The Compensation of Employees (COE) and Operating Surplus (OS) data were obtained from the OECD national accounts. The COE, OS, and total hours worked data for the mining sector, the agriculture, forestry and fishing sector, and the OS of owner-occupied dwellings were obtained from Statistics New Zealand and the Australian Bureau of Statistics. All COE and OS data (total, mining, agriculture and housing) were converted to real using the CPI for each country, and to US$ using 1995 PPPs.

An estimate of the labour income of sole-proprietors was calculated by multiplying the number of self-employed persons (obtained from the OECD labour force statistics) by an imputed wage rate; the imputed wage rate being Total COE divided by the total number of persons employed less the number of self-employed persons.

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