TY  - JOUR
AU  - Nordhaus,William D.
TI  - Alternative Methods for Measuring Productivity Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8095
PY  - 2001
Y2  - January 2001
UR  - http://www.nber.org/papers/w8095
L1  - http://www.nber.org/papers/w8095.pdf
N1  - Author contact info:
William D. Nordhaus
Yale University, Department of Economics
28 Hillhouse Avenue
Box 208264
New Haven, CT  06520-8264
Tel: 203/432-3598
Fax: 203/432-5779
E-Mail: william.nordhaus@yale.edu
AB  - The present study is a contribution to the theory of the measurement of productivity growth. First, it examines the welfare-theoretic basis for measuring productivity growth and shows that the ideal welfare-theoretic measure is a chain index of productivity growth rates of different sectors which uses current output weights. Second, it lays out a technique for decomposing productivity growth which separates aggregate productivity growth into three factors -- the pure productivity effect, the effect of changing shares, and the effect of different productivity levels. Finally, it shows how to apply the theoretically correct measure of productivity growth and indicates which of the three different components should be included in a welfare-oriented measure of productivity growth. The study concludes that none of the measures generally used to measure productivity growth is consistent with the theoretically correct measure.
ER  -