Measuring Productivity

Abstract

Quantifying productivity is a conditio sine qua non for empirical analysis in a number of research fields. The identification of the measure that best fits with the specific goals, as well as being data driven, is currently complicated by the fact that an array of methodologies is available. This paper provides economic researchers with an up‐to‐date overview of issues and relevant solutions associated with this choice. Methods of productivity measurement are surveyed and classified according to three main criteria: (i) macro/micro; (ii) frontier/non‐frontier and (iii) deterministic/econometric.

Keywords: Aggregate productivity, Development accounting, Firm‐level productivity, Frontier analysis, Omitted price bias, TFP