Measuring Productivity: Lessons from Tailored Surveys and Productivity Benchmarking
We use tailored surveys and benchmarking in the flat-weave rug industry to better understand the shortcomings of standard productivity measures. TFPQ performs poorly because of variation in product specifications across firms. Controlling for specifications aligns TFPQ with lab benchmarks. We also collect quality metrics to construct quality productivity (the ability to produce quality given inputs) and find substantial dispersion across firms. This motivates interest in multi-dimensional productivity, or capability. As quality productivity is negatively correlated with TFPQ, TFPR may perform better at capturing capabilities in settings where better firms make products with more demanding specifications that have greater input requirements.
We thank AbdelRahman Nagy and the Egypt field team. We acknowledge generous funding from the International Growth Centre, Private Enterprise Development for Low-Income Countries, Innovations for Poverty Action, Economic Growth Center at Yale University, McMillan Center at Yale University and the Jerome A. Chazen Institute for Global Business at Columbia Business School. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
David Atkin & Amit K. Khandelwal & Adam Osman, 2019. "Measuring Productivity: Lessons from Tailored Surveys and Productivity Benchmarking," AEA Papers and Proceedings, vol 109, pages 444-449. citation courtesy of