The method entails the project members to trade economic transactions in- volved in the production of goods and services from their inception (purchase of materials, intermediate products, energy inputs, etC.) to their final delivery (sales either to other firms as intermediate consumption goods or services or as capital equipment, or to the disposing agents of final demand, namely house- holds, governments, or exporters).
In the case of a cotton textile product, for example, the domestic value output (say, Yt) will be adjusted first by extracting exported portions (Xt)and adding imported goods (Mt) and taking note of changes in inventory (Int), to arrive at the estimated value of domestic consumption of the said commodity (Ct), so that
Ct = Vt + Mt - Xt - Int,
ignoring commodity wastes for simplicity's sake. The total domestic consumption of all the textile outputs for a particular year may be obtained by repeating the same procedure for all the goods and services transacted in the industry and summing them Up. An exemplary long-term estimating work of personal consumption expenditures is given by Shinohara (1967), Volume 6 of the LTES Japan series.
Possible Uses of the Project Outcomes
Why does one bother with estimating LTES at all?
The answer to the question varies undoubtedly from one person to another. The final outputs of the proiect should be as value neutral as possible so that they can be utilised for as many different purposes as conceivable. The neutral stance notwithstanding, it may also serve a good purpose to spell out here possible uses of the database as envisioned by those who promote the project, with the hope that this will stimulate further intellectual curiosity in such a way that the database may be subject to critical and constructive comments.
First and foremost, it serves as a basic indicator of macro economic performance over time and also of possible structural changes in the economy. Second, a very profitable use may be made of the macro economic time series as part of the study of comparative economic history (or comparable economic development).
