The Estimation Of The Chinese Cities’ Fixed Capital Stock

In the analysis of social wealth, efficiency, growth, distr ibution and other relatedeconomic issues in all, the amount and configuration of the capital is a key issue.However, the capital stock of our municipal administrative units is still a lack ofspecialized research and estimates, which leads the municipal economic research lackof reliability and comparability. Thus, the special research of estimation of China’surban capital stock has certain theoretical and practical significance.Based on analyzing and summarizing the domestic and foreign relevant resear ch,the related concepts of the capital stock and the estimation method is introductedsimply,the four variables of the perpetual inventory method would be treated like this:(1) considering the construction period of China’s fixed asset investment is thre e yearson average, the average of investment of the first three years represent eachinvestment I in the formula of perpetual inventory approach;(2) the gross weightedprice index of fixed assets P is obtained by weighting construction and installationprice index, equipment investment index and other cost index; in order to make surethat there are no difference in weight between the price index and depreciation rate offixed assets, the weight here is the average investment proportion of the three porti oninvestment of the first three years which is divided according to the capitalcomposition;(3) using the data of the estimated depreciable life of buildings andequipment and the weight mentioned above, we can get the average depreciable life ofevery province, assume that the salvage value of capital goods when retired amount to5%of new capital goods, then we can get the depreciation of each province, at last letthe fixed assets depreciation rate of each city in the same province equal;(4) becauseof the time series data of Chinese cities is shorter and choose the following formula toestimate the initial capital stock K0:(1+g)/(g+d) is divided by the initial fixed assetinvestment.The time series data fixed assets investment primarily is treated t hrough threesequence processing: first of all, added the investment data of each year before thenew city was set up; Secondly, to adjust GDP of some city according to the change ofmunicipal administrative districts areas; Finally, examine the data and according tothe other statistical index to adjust abnormal data in the sequence. The capital stockdata of286Prefecture-level and above cities are be estimated from1996to2009, using the perpetual inventory method. The production function about the cities ofChina is regression estimated using the capital stock and investment data. Theregression results prove that the capital stock estimated in this paper is available, andthe capital stock data is important. Moreover, the capital output ratio computedindicates that the capital stock data estimated is relatively reasonable.