Index Number and Factor Demand Approaches to the Estimation of Productivity

David H. Good, M. Ishaq Nadiri, Robin C. Sickles

    Research output: Chapter in Book/Report/Conference proceedingChapter


    Our chapter will discuss the empirical and theoretical issues related to identifying and estimating the sources of productivity growth. There is a voluminous literature on the subject and there exists a vast amount of empirical evidence based on aggregate, industry, and firm data for the US, OECD, and developing countries. The pioneering work of Dale Jorgenson and his associates1 and Zvi Griliches and his associates2 and many others in US universities and research institutions, the World Bank, and research institutes in Europe and other countries is not discussed here. Our objectives are much narrower. We discuss only two approaches to productivity analysis: the index number approach and use of factor demand models. Both static and dynamic versions are used to specify the underlying technology and then estimate the factors that contribute positively or negatively to productivity growth. To illustrate the theoretical and empirical issues involved, we have presented a number of models and studies that we have been engaged in over the years. These studies are used as illustrations of the considerable progress achieved by the many researchers who have devoted their efforts to this general class of problems. The examples we have provided cannot represent or replicate all of other researchers' work but rather are intended to provide an illustration of the general class of studies on the subject.

    Original languageEnglish (US)
    Title of host publicationMicroeconomics
    Number of pages62
    ISBN (Electronic)9781405166416
    ISBN (Print)9780631216339
    StatePublished - Feb 28 2008


    • Allocative distortions
    • Alternative structural models
    • Collusive markets
    • Dynamic models
    • Econometric estimation issues
    • Factor demand
    • Fixed factor dynamics
    • Index number approaches
    • Measurement
    • Productivity measurement
    • Static factor demands
    • Structural approaches

    ASJC Scopus subject areas

    • General Economics, Econometrics and Finance
    • General Business, Management and Accounting


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