Estimating Cuban gross domestic product per capita in dollars using physical indicators

Abstract

A methodology for estimating levels of gross domestic product per capita (GDP/capita) which obviates the need for estimating GDP/capita in domestic currency and converting to another currency is the physical indicators (PI) approach developed by Janossy-Ehrlich. Using this methodology, estimates of Cuban GDP/capita in dollars for four years (1965, 1970, 1975 and 1977) have been made. The estimates rely on the relationships between GDP/capita in dollars and levels of consumption or production of 24 physical indicators in 28 reference countries for each of the four years. The relationships are estimated using both univariate and multivariate regression techniques. The PI estimates of GDP/capita in dollars are compared with other measures of Cuban macroeconomic performance to test their reasonableness. The paper closes with some tentative conclusions regarding the applicability of the PI method to the estimation of GDP/capita in dollars for Cuba and for other developing countries.