**From:** Paul C (*clyder@GN.APC.ORG*)

**Date:** Tue Sep 21 2004 - 16:55:42 EDT

**Next message:**Paul C: "Re: Seminar: Value redundancy and price value deviations"**Previous message:**Gerald A. Levy: "(OPE-L) Re: Seminar: Value redundancy and price value deviations"**In reply to:**Alejandro Valle Baeza: "Re: Seminar: HILBERT SPACE MODELS COMMODITY EXCHANGES by Paul Cockshott"**Next in thread:**Ian Wright: "Re: Seminar: HILBERT SPACE MODELS COMMODITY EXCHANGES by Paul Cockshott"**Reply:**Ian Wright: "Re: Seminar: HILBERT SPACE MODELS COMMODITY EXCHANGES by Paul Cockshott"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ] [ attachment ]

Alejandro Valle Baeza wrote: > > > Paul Cockshott wrote: > >> Recently Steedman (1998) proposed to measure such deviations by the >> angle between market price and value vectors, as pointed out by >> Cockshott. Nobody uses Euclidian distance to measure value-price >> deviation. Nevertheless is not clear to me if according to Paul’s >> paper are all of them wrong? Could Paul explain practical >> implications of his paper for measuring labor value-price deviations? >> >> --------------------------------------------- >> >> I think that Steadman's measure is probably wrong, and that mean >> absolute deviation >> >> is a more appropriate measure. >> >> --------------------------------------- >> > This is very important to me because you are finding bases to > intuitive approaches for measuring value price deviations. Could you > tell us more about why MAD seems more convenient than angle proposed > by Steedman? > >> Alejandro Valle Baeza >> At first when I looked at the problem of testing the similarity of prices and values I hit on a measure similar to Steadmans - the normalised dot product of the two vectors which is the cosine of their angle. It was only later that I thought that such calculations of angles assume that you are operating in a euclidean space. If the metric of distance is different in your space then such measures are not appropriate. On the other hand the sum of absolute differences does correspond to the metric formula for distances in commodity space. It follows that the mean absolute difference - which is derived from the sum of absolute differences, also follows the same form, and as such is an appropriate measure of distance in commodity space.

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