This article is part of a broader study of the growth of East European economies made at the Project on National Income in East Central Europe, Columbia University. The author wishes to acknowledge the advice and support of Dr. T. P. Alton, Professor Alexander Erlich, and his colleagues at the Project.

1 Chapman, Janet G., Real Wages in Soviet Russia since 1928 (Cambridge, Mass., 1963), p. iii CrossRefGoogle Scholar.

2 In the calculation of the Polish index, we benefited from a preliminary version made by Dr. Bogdan Mieczkowski. The Czechoslovak index is presented in detail in my “Czechoslovak Personal Consumption, 1937, 1948-1960,” unpublished Ph.D. dissertation, Columbia University, 1964. The Polish and Hungarian indexes are described and documented in mimeographed work papers available from the Project.

3 This variant is based on current market prices adjusted so as to approximate hypothetical factor costs. The factor-cost adjustment is limited to the correction of the most flagrant deviation of market prices from factor costs, that is, housing rentals, which have notoriously been excessively low in the three countries. Deviations of market prices from factor cost in other series, due mainly to unequal rates of turnover tax and profits, could not be corrected because of lack of data; they were assumed to have been randomly distributed and have been disregarded. We decided not to encumber this paper with any other of the possible index variants based on alternative weighting regimens. The overall results would be neither enriched nor significantly altered. The selective nature of the representative samples and the uncertain quality of the statistical material hardly permit more than rough order-of-magnitude comparisons.

4 See examples cited in Alton, T. P. et al., Czechoslovak National Income and Product, 1947-1948 and 1955-1956 (New York, 1962), pp. 86–87 Google Scholar, and my article “Czechoslovak Economic Quandary,” East Europe, XIII, No. 11 (Nov. 1964), 7-9.

5 Calculated from annual absolute data (at constant prices, wherever available) in United Nations, Yearbook of National Accounts Statistics, 1960 and 1963, passim.

6 The estimates for Czechoslovakia, Hungary, and Poland are based on calculations made at the Project. The 1955 or 1956 percentage shares of personal consumption and gross investment at adjusted factor cost, used as benchmark figures, were taken from Alton, et al., Czechoslovak National Income, p. 70 Google Scholar; Alton, T. P. et al., Hungarian National Income and Product in 1955 (New York, 1963), p. 1963 Google Scholar, and Polish National Income and Product in 1954, 1955 and 1956 (New York, 1965), Table 9. These benchmark shares were extended according to the corresponding indexes of real personal consumption and gross investment, available in manuscript. From the resulting figures and indexes of real GNP by origin of the respective countries, also available in manuscript, we then derived the shares of GNP uses in the other years, government expenditure being taken as the residual.

7 These results may be usefully compared with measurements made by George Staller, on the basis of official figures, in “Fluctuations in Economic Activity: Planned and Free- Market Economies, 1950-60,” American Economic Review, LIV, No. 4 (June 1964), 385-95.

8 The statistical measure used in the comparisons was the average “expenditure elasticity“ for 1950-60 defined as the ratio of the rate of change in expenditure for a category of consumption (in constant monetary units) to the rate of change in total real consumption. Thus, “expenditure elasticity” for food has the formula

where dF/F is the relative change in the real expenditure for food, and dC/C the relative change in total real consumption expenditure. The breakdown into categories followed that used in U.N. publications and described in A System of National Accounts and Supporting Tables (New York, 1953), Appendix 2, pp. 39-41 (United Nations, “Studies in Method,” No. 2).

9 Calculated from data in Czechoslovakia, State Statistical Office, Statistickd rocenka, 1957, p. 89; and 1962, p. 113.

10 See ibid., 1957, p . 89; and 1962, p. 114.

11 Calculated from data ibid., 1962, p. 273. Compare the extremely similar results obtained from a sample of Connecticut families in an article by Bilkey, Warren J. et al., “The Structural Effects on Consumer Disbursements of Wives Working,” Review of Economics and Statistics, XLIV, No. 2 (May 1962), 221–24CrossRefGoogle Scholar.

12 The above-cited household budget study for 1960 shows the percentage of saving deposits from gross cash income as 4.7 for single-earner households and 7.0 for two-earner households.

13 The deflation method consists in converting the values of per capita personal consumption of a given year, expressed in domestic currency and at domestic prices of the respective countries, to one common currency, by means of an “international price deflator.“ In the present case the deflator was calculated by valuing the 1955 basket of goods consumed in Czechoslovakia at the respective prices in crowns, forints, zlotys, and German marks (DM); the ratios of the resulting total values of the Czechoslovak consumption basket amount to the index of the general price levels of consumer goods in the four countries (Czechoslovakia = 100); this index was then applied to deflate the original current values of per capita consumption. For detailed calculation and source documentation, see my “Czechoslovak Personal Consumption,“ Appendix D. The year 1955 was used as basis for comparison throughout, because it was the one year common to calculations made for all the countries.

14 Gilbert, Milton et al., Comparative National Products and Price Levels (Paris: Organization for European Economic Cooperation, 1958)Google Scholar.

15 For a restatement of this familiar phenomenon in international comparisons, see, for example, M. Gilbert and W. Beckerman, “International Comparisons of Real Product and Productivity by Final Expenditures and by Industry,” in Output, Input, and Productivity Measurement (Princeton, 1961), pp. 261-64. Another important ground for regarding the East European figures as the upper limit is the absence of an adjustment—crucial in this instance—for quality differences. Assuming that the West-East quality differential has been equivalent to the official Hungarian estimate of prewar-to-1955 domestic quality deterioration, one would have to subtract some 15 percent of the 1955 relatives for the three East European countries in Table 5. See my “Consumption and Welfare,” Problems of Communism, XIII, No. 6 (Nov.-Dec. 1964), 60-61.

16 A magyar gazdasagkutato intet, Kozlemenyei, No. 4 (Budapest, 1947).

17 Calculated from data in MiloS, Stadnik, Ndrodni duchod a jeho rozdHeni (Prague, 1946), p. 206 Google Scholar.

18 The aggregative procedure consists in calculating the total money value of a representative sample of per capita consumption of goods and services in the different countries, valued at one set of prices used as weights. The ratio of the resulting total values yields immediately the desired international index of total per capita consumption in a given year. For details of calculation, see my “Czechoslovak Personal Consumption,” Appendix D.

19 See ibid., Appendix Table D-2.

20 As a by-product, the closeness of the results serves to strengthen confidence not only in the deflator but also in the estimates of the nominal values of personal consumption made in the studies of the Project (cited in footnote 6) and used in the derivation of the 1955 benchmark relatives in T a b l e 5.