Multifactor Productivity in Canada: An Evaluation of Alternative Methods of Estimating Capital Services
The Canadian Productivity Review, Catalogue No. 15-206-XIE, No. 009, 2007
53 Pages Posted: 18 Nov 2009
Date Written: April 4, 2007
This paper examines the effects of alternative specifications of the user costs of capital on the estimated price and volume indices of capital services. It asks how sensitive the results are to the use of exogenous versus endogenous rates of return, to alternate ways of including capital gains, and to whether corrections are made for tax rates. The paper also examines the effect of the various user cost formulae on the measured multifactor productivity growth.
Keywords: multifactor productivity, capital services, rental price of capital
JEL Classification: D24, J24, O47, E22, H54
Suggested Citation: Suggested Citation