The Interrelationship between Cost and Price Chang

Oxford Economic Papers, October 1961

Wage (Averages)

Final Prices

I0

Import Prices

I1

Import Prices lagged one quarter

I2

Import Prices lagged two quarter

Per Capita Output

DL

Pressure of demand for Labor

Time Trend

Dependent Variable: P
Method: Two-Stage Least Squares
Included observations: 13
Instrument list: C DL X I0

Equation 1

Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
W
I0
X

2.389217
0.340899
0.182659
-0.628893

1.660642
0.242180
0.040183
0.199142

1.438730
1.407627
4.545705
-3.158015

0.1841
0.1928
0.0014
0.0116

0.909868
0.879824
1.123448
28.43227
0.000064

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
4
Prob(F-statistic)

4.107692
3.240746
11.35923
2.284137

Dependent Variable: P
Method: Two-Stage Least Squares
Included observations: 13
Instrument list: C DL X I0 I1 I2

Equation 2

Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
W
I0
X

0.901761
0.570490
0.154108
-0.560540

1.327499
0.189598
0.034087
0.180817

0.679293
3.008948
4.521086
-3.100046

0.5140
0.0147
0.0014
0.0127

0.922817
0.897089
1.039622
35.44887
0.000026

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
5
Prob(F-statistic)

4.107692
3.240746
9.727320
1.857158

Dependent Variable: W
Method: Least Squares
Included observations: 13

Equation 1.1

Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
DL
X
I0

6.358930
3.573870
-0.402455
0.026463

0.624846
0.992768
0.214901
0.040872

10.17680
3.599906
-1.872747
0.647460

0.0000
0.0057
0.0939
0.5335

0.774426
0.699234
1.288618
14.94482
-19.35240
2.106281

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
6
Durbin-Watson stat

6.453846
2.349686
3.592677
3.766507
10.29939
0.002872

Dependent Variable: W
Method: Least Squares
Included observations: 13
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
DL
X
I0
I1
I2

5.867657
3.164919
-0.245390
-0.171315
0.179404
0.054169

0.492828
0.752519
0.176459
0.306397
0.495099
0.217585

11.90609
4.205767
-1.390639
-0.559128
0.362359
0.248958

0.0000
0.0040
0.2069
0.5935
0.7278
0.8105

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
7

Equation 2.1

0.903436
0.834461
0.956004
6.397604
-13.83753
1.772752

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

6.453846
2.349686
3.051928
3.312674
13.09812
0.001932

Dependent Variable: P
Method: Two-Stage Least Squares
Included observations: 13
Instrument list: C DL X I0 I1 I2

Equation 2(1)

Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
W
I0
X

0.901761
0.570490
0.154108
-0.560540

1.327499
0.189598
0.034087
0.180817

0.679293
3.008948
4.521086
-3.100046

0.5140
0.0147
0.0014
0.0127

0.922817
0.897089
1.039622
35.44887
0.000026

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
8
Prob(F-statistic)

4.107692
3.240746
9.727320
1.857158

Dependent Variable: P
Method: Two-Stage Least Squares
Included observations: 13
Instrument list: C DL X I0 I1 I2

Equation 2 (2)

Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
W
I1
X

2.229867
0.310682
0.201747
-0.532432

1.177250
0.178662
0.033297
0.143631

1.894131
1.738943
6.059091
-3.706945

0.0907
0.1160
0.0002
0.0049

0.950130
0.933507
0.835666
56.55646
0.000004

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
9
Prob(F-statistic)

4.107692
3.240746
6.285041
2.740681

Equation 2 (3)
Dependent Variable: P
Sample: 1947 1959
Included observations: 13
Instrument list: C DL X I0 I1 I2

C
W
I2
X
R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
10

2.519126
0.222018
0.215416
-0.449407

1.802780
0.290071
0.056305
0.197727

0.902853
0.870471
1.166349
27.63004
0.000071

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

1.397357
0.765393
3.825904
-2.272869

0.1958
0.4636
0.0041
0.0491
4.107692
3.240746
12.24333
3.021475

Dependent Variable: W
Method: Two-Stage Least Squares
Included observations: 13
Instrument list: C DL X I0 I1 I2
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
P
DL
X

4.884088
0.309929
2.663867
-0.157206

0.897051
0.150959
0.886521
0.212916

5.444603
2.053072
3.004854
-0.738349

0.0004
0.0703
0.0148
0.4791

0.851584
0.802112
1.045250
16.84644
0.000492

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
11

Equation 3

6.453846
2.349686
9.832923
1.866500

Dependent Variable: W
Method: Two-Stage Least Squares
Included observations: 13
Instrument list: C DL X I0 I1 I2

Variable

C
P
DL

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
12

Equation 3 .1

Coefficient

Std. Error

t-Statistic

Prob.

4.336960
0.374063
2.335770

0.491986
0.120148
0.746506

8.815207
3.113353
3.128937

0.0000
0.0110
0.0107

0.843833
0.812600
1.017174
26.39607
0.000102

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

6.453846
2.349686
10.34642
1.731763

Dependent Variable: W
Method: Two-Stage Least Squares
Included observations: 12 after adjustments
Instrument list: C P(-1) DL X I0
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
P
P(-1)
DL
X

4.611421
0.188744
0.164841
3.242652
-0.199285

1.027742
0.163837
0.106698
0.982951
0.221441

4.486945
1.152021
1.544928
3.298895
-0.899946

0.0028
0.2871
0.1663
0.0131
0.3981

0.866115
0.789609
1.069199
10.80696
0.004054

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
13

Equation 3 (1)

6.250000
2.331016
8.002306
1.726672

Dependent Variable: W
Method: Two-Stage Least Squares
Included observations: 12 after adjustments
Instrument list: C P(-1) DL X I0 I1 I2
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
P
P(-1)
DL
X

4.275521
0.267915
0.154468
2.892870
-0.138373

0.975518
0.151693
0.103148
0.929458
0.211439

4.382819
1.766171
1.497544
3.112427
-0.654434

0.0032
0.1207
0.1779
0.0170
0.5337

0.874441
0.802693
1.035420
11.94964
0.003019

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
14

Equation 3 (2)

6.250000
2.331016
7.504657
1.499565

Equation 3 (1) - 1
Dependent Variable: P
Method: Least Squares
Included observations: 12 after adjustments
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
DL
X
P(-1)
I0

3.281741
1.266743
-0.690395
0.247359
0.213457

0.882731
0.961160
0.208375
0.121288
0.039926

3.717712
1.317931
-3.313227
2.039427
5.346350

0.0075
0.2290
0.0129
0.0808
0.0011

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
15

0.912575
0.862618
1.220643
10.42978
-16.18581
2.673769

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

3.900000
3.293244
3.530969
3.733013
18.26720
0.000829

Dependent Variable: P
Method: Least Squares
Included observations: 12 after adjustments

Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
DL
X
P(-1)
I0
I1
I2

4.491384
0.681110
-0.611071
-0.114271
0.066371
-0.016662
0.201735

1.111237
0.972025
0.209496
0.242334
0.369166
0.624779
0.319112

4.041786
0.700712
-2.916857
-0.471544
0.179786
-0.026669
0.632177

0.0099
0.5147
0.0331
0.6571
0.8644
0.9798
0.5550

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
16

Equation 3 (2) - 1

0.946128
0.881481
1.133752
6.426973
-13.28084
2.840511

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

3.900000
3.293244
3.380141
3.663003
14.63533
0.004905

Dependent Variable: W
Method: Two-Stage Least Squares
Included observations: 12 after adjustments
Instrument list: C P(-1) DL X I0 I1 I2
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
P
P(-1)
DL
X

4.275521
0.267915
0.154468
2.892870
-0.138373

0.975518
0.151693
0.103148
0.929458
0.211439

4.382819
1.766171
1.497544
3.112427
-0.654434

0.0032
0.1207
0.1779
0.0170
0.5337

0.874441
0.802693
1.035420
11.94964
0.003019

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
17

Equation 4

6.250000
2.331016
7.504657
1.499565

Dependent Variable: W
Method: Two-Stage Least Squares
Included observations: 12 after adjustments
Instrument list: C P(-1) DL X I0 I1 I2 T
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
P
P(-1)
DL
X

4.236647
0.277077
0.153267
2.852388
-0.131323

0.974012
0.151347
0.103042
0.927920
0.211148

4.349688
1.830746
1.487432
3.073961
-0.621949

0.0034
0.1098
0.1805
0.0180
0.5537

0.874687
0.803079
1.034406
12.02961
0.002960

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

R-squared
Adjusted R-squared
S.E. of regression
F-statistic
Prob(F-statistic)
18

Equation 4 (1)

6.250000
2.331016
7.489974
1.472520

Dependent Variable: P
Method: Least Squares
Included observations: 12 after adjustments
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
P(-1)
DL
X
I0
I1
I2
T

3.494544
-0.047976
0.939180
-0.571627
0.129446
-0.091469
0.220790
0.071966

3.794458
0.359168
1.422038
0.272021
0.467668
0.742470
0.359986
0.259131

0.920960
-0.133576
0.660446
-2.101407
0.276789
-0.123196
0.613329
0.277720

0.4092
0.9002
0.5451
0.1035
0.7957
0.9079
0.5728
0.7950

0.947147
0.854654
1.255527
6.305392
-13.16625
2.876564

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
19
Log likelihood
Durbin-Watson stat

3.900000
3.293244
3.527709
3.850980
10.24018
0.020118

Dependent Variable: W

Equation 4 (2)

Method: Two-Stage Least Squares

Included observations: 12 after adjustments
Instrument list: C P(-1) DL X I0 I1 I2 T
Variable
C
P
P(-1)
DL
X
T
R-squared
Adjusted R-squared
S.E. of regression
F-statistic
20
Prob(F-statistic)

Coefficient

Std. Error

t-Statistic

Prob.

0.060042
0.358472
0.310077
3.906700
0.152050
0.306489

1.933663
0.122644
0.104295
0.849679
0.203740
0.130568

0.031051
2.922867
2.973065
4.597855
0.746296
2.347345

0.9762
0.0265
0.0249
0.0037
0.4837
0.0573

0.935105
0.881025
0.804032
17.03059
0.001735

Mean dependent var

S.D. dependent var
Sum squared resid
Durbin-Watson stat

6.250000
2.331016
3.878804
1.381054