| Summary: | Part of a special section on depreciation. The writer surveys empirical research on depreciation based on an econometric model of asset prices introduced by R.E. Hall in “The Measurement of Quality Changes from Vintage Price Data,” which appeared in Price Indexes and Quality Change, 1971, pp. 240-271. He demonstrates how Hall's model offers a vehicle for unifying research on constant quality price indices and depreciation. In addition, he outlines the role of depreciation in an integrated system of income, product, and wealth accounts. He concludes that the system of vintage price and quantity accounts introduced by L.R. Christensen and D.W. Jorgenson (1973) is the key to integrating income and product accounts with wealth accounts and incorporating relative efficiencies of assets of different ages based on econometric estimates of vintage price functions.
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