Price deflator for new investment (equals 1 in 1997). This combines separate deflators for structures and equipment, based on the distribution of each type of asset in the industry. Note that this is a deflator for new investment flows, not for the existing capital stock. The ASM provides annual data for gross nominal capital expenditures on equipment and structures. However, it lacks information on depreciation rates and investment deflators, which are necessary in order to construct the real capital stocks in the database.

Depreciation rates are derived from Federal Reserve Board data (FRB). Depreciation rates are calculated for each industry, backing them out of a standard perpetual inventory equation: `K_t = (1-d_{t-1})K_{t-1} + I_t`, where `d` is the rate of depreciation, `K` is the real capital stock in years `t` and `t-1`, and `I` is the real capital investment in year `t`.

To calculate the investment deflator, price indexes for equipment and structures are computed from the ratios of nominal and real investment for the 4-digit NAICS industries in the FRB data. The final deflator values are created as the weighted mean of the two types of capital expenditures. The shares used for the weights are averaged over years `t` and `t-1`. For detailed information please refer to http://www.nber.org/nberces/nberces5809/nberces_5809_technical_notes.pdf