On Measuring the Deviation of Prices from Values.

It has often been found useful to measure in some way the extent to which (with-profit) prices diverge from (zero-profit) values. But it is not satisfactory to employ a measure which varies with the choice of numeraire, for this element of arbitrariness has nothing to do with the central idea of asking how much the direction of the price vector differs from that of the value vector. The authors develop a measure which involves no numeraire and then illustrate its use with data from the United Kingdom, the Irish Republic, and Australia. Copyright 1998 by Oxford University Press.