METHODOLOGICAL PROBLEMS AND DATA SOURCES

My estimates of net capital and net investment in structures are based upon three separate studies; Kahan's estimates of capital stock in structures for the period 1890–1913, upon Vainshtein's estimates of industrial, urban residential, and rural structures for the period 1911 to January 1914, and our independent study of agricultural structures between 1883 and 1914. The point of departure for these estimates of capital in structures is the insured values of agricultural and industrial structures (adjusted for coverage). The use of insured values should yield a net stock series (or an approximation thereof), as, at least in the long run, the insured value should reflect the market value of the existing net stock. The net stock series in current market prices are then deflated by a construction cost price index to yield series in constant prices. Net investment is then calculated by taking first differences.

Kahan's study does provide real net capital stock estimates of the three relevant series (industry, agriculture, and urban residential structures) from 1890 to 1913; so it would seem that it would only be necessary to extend his series back to 1885 to obtain net stock and investment figures for the entire period. In this study, I employ the Kahan estimates only in specific instances.