Questions tagged [productivity]

A measure of efficiency in production for some given set of inputs

Filter by
Sorted by
Tagged with
8 votes
1 answer
868 views

What are the causes for the recent dramatic decline in productivity in the US

The recent Q2 release by the BLS on "Productivity and Costs", shows a big drop in productivity (the biggest ever since 1948): more work-hours but less output. Nonfarm business sector labor ...
  • 273
0 votes
0 answers
17 views

interpretation of Malmquist index

I'm studying Malmquist TFP index in recent lecture. I understood output oriented Malmquist index can be decomposed into two part (EC * TC) EC : Efficiency change, TC : Technical change EC > 1 : ...
0 votes
1 answer
33 views

Calculation of labor, capital and productivity deviation

In Ohanian (2010): The Economic Crisis from a Neoclassical Perspective ( https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.4.45 ) I read about labor, capital and productivity deviation. I would like ...
  • 13
3 votes
1 answer
199 views

Steady-state savings rate

I'm having trouble with the steady-state savings rate type of problems. Here is the problem I'm stuck on: The production is $Y = 0.5*K^{1/3}(AN)^{2/3}$. If savings is $s$%, what are the steady-state ...
3 votes
1 answer
42 views

Intuition behind value added as TFP measure

In some papers the authors use value-added over capital and labor as TFP measure, what is the intuition behind this? For example, in one paper I just read the authors use $ \frac{VA}{(p_{K}K + p_{L}L)}...
1 vote
1 answer
26 views

Why are prices deflated in a productivity estimation?

When measuring TFP with the Olley-Pakes method for example, why is it the case that the input and output prices are deflated by an industry price index? What's the intuition behind this? Say we use ...
1 vote
0 answers
13 views

Is there any good summary, lecture notes, textbook or videos that give overview of firm-level productivity models?

As the title says, I am looking for some tutorials/educational materials for firm-level productivity models. I am looking for some source that would cover the most commonly used models. Also, it is a ...
  • 2,220
1 vote
1 answer
34 views

The CORE team's writings about labour productivity, real wages, markup and the price-setting curve

I've been reading the free online economics handbook that's developed as part of the CORE-project (here). The book is a refreshing read, but I'm struggling to follow their discussion of the price ...
  • 111
0 votes
1 answer
42 views

Relationship between capital and decreasing marginal prodcutivity

In Capital by Thomas Piketty ( chapter The capital - labor spit in the twenty first century - page 271) we have below quote The evolution of the rate of return on capita, r, significantly reduces the ...
  • 103
5 votes
2 answers
89 views

Error while estimating a production function with prodest package in R

I have an unbalanced panel with 15063 firms between 2012 and 2018. I am using this code to estimate the production function with Levinsohn & Petrin method: ...
0 votes
1 answer
23 views

can Unit Labour Cost > 100%?

I struggle to interpret this ECB chart: click here for the chart Several countries show consistently $Unit Labour Cost \gg 100%$. For example, Lithuania. Cost of labour $\gg$ Total Output, doesn't ...
0 votes
0 answers
45 views

Relationship between productivity and GDP

I was looking at the OECD data for GDP per hour worked as a stand in for productivity and was extremely confused when I started comparing the numbers and tried to understand the relationship between ...
0 votes
1 answer
68 views

Literature recommendation

Classic economic theory suggests people earn wages according to their productivity. Over time CEO's, directors, managers and the like seem to earn more relative to the 'normal worker'. Lets call this ...
-1 votes
2 answers
85 views

Competitive wages under imperfect information

Do competitive wages always have to be defined by marginal productivity? Can we have competitive wages which are not based on productivity, when the information is not perfect? To put it in context, ...
2 votes
1 answer
64 views

Human Capital Vs TFP

I'm interested in familiarizing myself with some of the intra-debates that have occurred over the years, having to do with Mankiw, Romer, Weil (1992) and Klenow, Rodriguez-Clare (1997). Some argue ...
1 vote
2 answers
96 views

Basic New Keynesian model with flexible price

I would like to know what would be the response of variables in the Basic New Keynesian model but with flexible prices (ie not with Calvo pricing). For example I have troubles to see how having ...
  • 437
1 vote
1 answer
102 views

etymology of TFP (total factor productivity)

In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs.1 Under some simplifications ...
  • 958
3 votes
0 answers
148 views

Arellano and Bond (1991) GMM estimation in R by using plm package

I am a last-year student at university, currently working on my Bachelor's (so still learning R), and I really hope that you would suggest a potential solution (even if to use Python). So, the main ...
1 vote
0 answers
51 views

How can I add a multidimensional panel to estimate TFP (year, id, region) in R?

I'm not sure about adding fixed effects for the variables year,id,region (using the estprod library) as in this paper using LP stimator. In the STATA forum ( #18 #...
  • 123
1 vote
1 answer
100 views

Unbalanced panel data in prodest package in R

I have a question regarding the usage of unbalanced panel data for TFP estimation by using the prodest package. The dataset could be found here: https://drive.google.com/file/d/...
8 votes
3 answers
1k views

All else being equal, What is the value of job creation?

Job creation value Just to clarify, I have no experience, academic background or deep understanding of economics. Apologies for such a basic question but I couldn't find a real answer. I hear a lot ...
0 votes
0 answers
24 views

Is this a correct way of calculating productivity? And can the proposed data be (accurately) used for doing so?

I want to know if my thinking for calculating productivity [2019-USD/hour-worked] is correct. Basics: Take the GDP of a country and divide by the total amount of hours worked in that country -> ...
0 votes
0 answers
436 views

Stochastic Frontier Analysis (SFA) in Stata: Technical Efficiency Estimates

I am prepared to look quite the fool, but hopefully you can help me. I am trying to perform Stochastic Frontier Analysis on a balanced panel dataset by estimating the following model: I think the ...
0 votes
0 answers
79 views

Prodest package in R for TFP estimation, gives different results

I have the following issue: each time I run the estimation of the TFP by using prodest package in R 4.0.3, I obtain different coefficients before the variables as well as omega variable is different: ...
2 votes
0 answers
279 views

Arellano and Bond (1991) or Blundell and Bond (1998) in R estimation

I have the following problem with the Arellano and Bond (1991) or Blundell and Bond (1998) estimators in R using the plm package. I receive the following problem when trying to run the needed ...
2 votes
2 answers
104 views

Are prices part of total factor productivity?

I am trying to understand how production is related to income/profit and where do prices enter. Suppose there is a single firm with a Cobb-Douglas production technology: $$Y=AK^{\alpha}L^{\beta}$$ ...
  • 145
1 vote
1 answer
123 views

TFP in R via estprod package

I want to calculate the TFP by using the estprod function (I use R 4.0.2). As far as I understood the only way to calculate the TFP is manual following this logic . ...
0 votes
0 answers
20 views

Which diagnostic tests are suitable for Measuring Total Factor Productivity (TFP)?

I did the TFP estimation with Levinsohn Petrin (in R) but I have doubts about the diagnostic tests e.g. I know that the estimation of autocorrelation in residuals has to be done (it would be very ...
  • 123
3 votes
1 answer
260 views

TFP estimation in R by using prodest and estprod packages

I am writing my Bachelor Thesis and I really need help with the TFP estimation. so far I have a dataset with log values of Value added (va), Labour (l), Capital (k), and Materials (m). The initial ...
0 votes
1 answer
49 views

Can demand side restrictions explain the productivity paradox (Solow paradox)?

Productivity paradox https://en.wikipedia.org/wiki/Productivity_paradox is the name for the slow productivity growth (i.e. slow GDP growth) of the developed economies despite the robotics, AI, ...
  • 375
1 vote
0 answers
39 views

Data on labour productivity in India

I am trying to find historical data at the district, or ideally at the city-level on labour productivity (by sector, with a special focus on agriculture) or perhaps data on a similar measure?
  • 21
1 vote
1 answer
31 views

Measurement for the downstream use of a commodity

I am looking to find a measurement that would tell me the size of the market of the downstream use of some particular commodity. For example, salt or wheat would be used by many companies downstream. ...
  • 13
1 vote
2 answers
225 views

Why labor-augmenting technological progress increases employment and wages?

My textbook says that advances in technology typically raise the marginal product of labor and shift the labor demand curve to the right and calls it labor-augmenting technological advances. The book ...
  • 11
4 votes
0 answers
109 views

CES aggregator for intermediates with heterogeneous productivity

I'm following Atkeson, Burstein (2019 JPE), and cannot understand the aggregation result. There is measure $M(z)$ of firms with productivity $z$, with production function $$ y(z) = z k(z)^\alpha l(z)^...
0 votes
1 answer
42 views

Low oil price and impact

Today I read an artcicle about the falling oil price (maybe it'll go under 30$ per barel the next days). Why is this a bad news? Lower oil price can give an advantage for a higher productivity.
  • 103
1 vote
1 answer
79 views

How would increase labor productivity lead to improved living standards of people in an economy?

I would like to know more about the mechanisms through which higher labor productivity would translate into higher living standards for a population in a given economy.
1 vote
1 answer
96 views

Measuring productivity with the Törnqvist index

I have a sample of companies, of which I want to calculate the productivity of each individual firm relative to a hypothetical firm in the industry. Choosing the measurement method was not easy, but ...
  • 11
0 votes
1 answer
20 views

What is the average percent of value an employee makes which he gets on salary (called)?

I'm looking for any statistics showing the average percent of money employees get from the monetary value they create, primarily from the US or EU. Is there a term for this ratio?
  • 165
0 votes
1 answer
43 views

BreakEven/productivity/salary/employees

If employees’ salaries are increased by 20%, what is the increase in productivity required to break even? Can someone assist me in solving this question? Productivity = (output per period)/(number ...
1 vote
2 answers
30 views

Are there any economic theories around the concept of companies focusing on that which is easier to calcuate?

A lot of the organisations I have worked for have focused on that which is easy to calculate. For example, direct cost savings are often easy to calculate, but analysing the wider implications of a ...
0 votes
2 answers
116 views

When does the law of diminishing returns apply?

Law of diminishing returns does not always apply: The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant, ...
9 votes
2 answers
5k views

Does recycling lead to fewer jobs?

Say I buy a glass bottle, I can either put it in the landfill or recycle it. My understanding is, glass will breakdown into sand. (Not sure how well though, since we sometimes find glass from Roman ...
  • 285
0 votes
2 answers
49 views

Persistent changes in relative prices due to productivity differences

I read a couple of years ago that in the long run (in centuries) the relative price between, say, schooling and agriculture keeps increasing, since the latter sector gets more and more productive, ...
  • 840
1 vote
1 answer
47 views

Why is increased productivity infinitely good

From investopedia: Supply rises with productivity, dropping real prices and increasing real wages; it lifts people out of poverty and allows them to focus on efforts beyond mere survival. I ...
1 vote
0 answers
21 views

Is the definition of Investment variable in Economics?

I studied that Investment is the expenditure incurred on the procurement of such goods that would help us in production of goods and services. And mainly consists of Fixed and Inventory Investment ...
  • 247
5 votes
2 answers
197 views

Can we see the computer age in the productivity statistics?

Robert Solow famously said: You can see the computer age everywhere but in the productivity statistics This quote is often linked with the productivity paradox (https://en.wikipedia.org/wiki/...
  • 1,344
1 vote
1 answer
67 views

Total factor productivity and revenue

On page 116 of The British Industrial Revolution in Global Perspective Robert Allen writes "...the total factor productivity of enclosed farms was 18 per cent higher than that of open fields. If ...
  • 111
1 vote
1 answer
245 views

Tax system is progressive or regressive

Let´s discuss a little! When the direct effect of a tax or transfer policy (compared to what would happen in the absence of the policy) is a reduction in inequality, it is called progressive policy. ...
  • 145
2 votes
0 answers
49 views

How can the number of hairdressers in the UK be up 50% since 2010?

In this recent article, The Economist argues that one of the reasons behind the anaemic recent wage growth in Britain is that the recent job growth has been concentrated in lower-productivity jobs and ...
  • 163
-2 votes
3 answers
101 views

What's a product that historically has always had the same value, and probably will in the future?

Money usually has inflation tied to it, but is there a product that has stayed around the same value world wide for a very long time, and probably will for a very long time as well (something like 100 ...