Index Number and Factor Demand Approaches to the Estimation of Productivity

89 Pages Posted: 4 Feb 1997 Last revised: 21 Mar 2010

See all articles by David H. Good

David H. Good

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

M. Ishaq Nadiri

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER)

Robin C. Sickles

Rice University - Department of Economics

Date Written: October 1996

Abstract

In this paper we review a number of analytical methods and issues related to identifying and estimating the source of productivity growth. The two major methods used in measuring productivity growth -- index number and econometric estimation approach -- are briefly discussed. Substantive issues such as the contribution of R&D capital and R&D spillovers, infrastructure capital, allocative distortions, nature of the market structure and technological advancement on productivity growth at various levels of aggregation are examined. The attributes of the static and dynamic factor demand models used to estimate the contribution of different inputs to productivity growth are described and the evaluation of the production process changes in response to exogenous factors and their impact on productivity growth are discussed. Econometric issues and data considerations for proper estimation of the underlying structural models are noted briefly as well.

Suggested Citation

Good, David Henning and Nadiri, M. Ishaq and Sickles, Robin C., Index Number and Factor Demand Approaches to the Estimation of Productivity (October 1996). NBER Working Paper No. w5790. Available at SSRN: https://ssrn.com/abstract=4606

David Henning Good

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

M. Ishaq Nadiri (Contact Author)

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States
212-998-8968 (Phone)
212-995-4013 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robin C. Sickles

Rice University - Department of Economics ( email )

6100 South Main Street
Houston, TX 77005
United States

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