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Applying a New Approach to Estimate the Net Capital Stock of Transport Infrastructure by Region in South Korea

Lee, Jongyearn

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Abstract

Given the limited availability of data in South Korea, this study proposes a method by which to estimate regional capital stock by modifying the benchmark year method (BYM) and applies it to estimate regional net capital stock by sector in transport infrastructure. First, it estimates time-varying sectoral depreciation rates using the sectoral net capital stock and the investment amount for each period. Second, it estimates the net capital stock of each period using the net capital stock in the base year and the investment in each period. Third, in order to ensure that the sum of net capital stocks by region is equal to the nationwide estimate, the national estimates are allocated to each region according to the proportion of the values derived from the previous stage. The proposed method can alleviate well-known problems associated with conventional BYMs, specifically the upward bias and arbitrary choice of the depreciation rate.

Issue Date
2018-05
Publisher
한국개발연구원
DOI
10.23895/kdijep.2018.40.2.23
Journal Title
KDI Journal of Economic Policy
Start Page
23
End Page
52
ISSN
2586-2995
Language
English
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