clptheory (version 0.1.0)

nregtestrel: Nonregression-based Measures of Deviation.

Description

This function computes various non-regression based measures of deviation between the vector of all possible relative labor values and the vector of all possible relative prices of production.

Usage

nregtestrel(x, y, w, w_avg, mev, Q)

Value

A list with the following elements:

rmse

Root mean squared error

mad

Mean absolute distance

mawd

Mean absolute weighted distance

cdm

Classical distance measure

angle

Angle between the two vectors (in degrees)

distangle

Distance computed using the angle

lrelpplv

Length of the relative price of production (or labor value) vector

Arguments

x

price vector (1 x n).

y

value vector (1 x n).

w

nominal wage rate vector (1 x n).

w_avg

average nominal wage rate (scalar)

mev

monetary expression of value using gross output (scalar)

Q

gross output vector (n x 1).

References

Basu, Deepankar and Moraitis, Athanasios, "Alternative Approaches to Labor Values andPrices of Production: Theory and Evidence" (2023). Economics Department Working Paper Series. 347. URL: https://scholarworks.umass.edu/econ_workingpaper/347/

Examples

# Input-output matrix
A <- matrix(
data = c(0.265,0.968,0.00681,0.0121,0.391,0.0169,0.0408,0.808,0.165),
nrow=3, ncol=3, byrow = TRUE
)
# Direct labor input vector (complex)
l <- matrix(
data = c(0.193, 3.562, 0.616),
nrow=1
)
# Real wage bundle
b <- matrix(
data = c(0.0109, 0.0275, 0.296),
ncol=1
)
# Gross output vector
Q <- matrix(
data = c(26530, 18168, 73840),
ncol=1
)
# Direct labor input vector (simple)
l_simple <- l
# Market price vector
m <- matrix(data = c(4, 60, 7),nrow=1)
# Uniform nominal wage rate
wavg <- m%*%b
# Vector of nominal wage rates
w <- matrix(data=rep(wavg,3),nrow=1)
# Value of labor power
v <- 2/3
# Compute prices of production using NI
ni1 <- ppnewint1(A = A,l = l,w = wavg[1,1],v=v,Q = Q,l_simple = l)
# Nonregression-based measures of deviation
nregtestrel(x=ni1$ppabs,y=ni1$lvalues,w=w,w_avg=wavg[1,1],mev=ni1$mevg,Q=Q)