The measurement of changes in real income under conditions of rationing in the United States during World War II

Diploma Thesis from the year 2003 in the subject Economics - History, grade: 2.3 (B), Free University of Berlin (Finance and Social Policy), language: English, abstract: [...] First, I will give an overview of the U.S. economy in chapter 2. After having done that, I will present several aspects concerning the calculation of a Rothbarian virtual price system. Thereby, it will be important to build an opinion about the preferences of the private households, which will be expressed as a generalized Cobb-Douglas demand system. Based upon that demand system an estimation equation for the households' preferences will be derived in section 3, followed by an ordinary least squares regression of the preference parameters. The second important step will be a presentation of the basic information we can win from index number theory. It will be especially interesting to say a few words about economic index number theory (see chapter 4.2). The combination of the outcomes from estimation with index number theory makes up the most important step to unlock hidden dierences between wartime-prices and postwar prices, i.e. I will compare wartime demand to postwar demand and the impact of rationing on changes in income. This procedure will be done by calculating deators using both the estimated demand behavior and virtual prices. In every section, I will present both the basic theoretical aspects, which will help the reader understand the steps to deators, and applied theory, i.e. estimations using empirical data in most cases.