6 Conclusion
This paper provides an introduction to productivity measurement using the index number approach. Consideration was given to this approach, rather than alternative approaches to productivity measurement, owing to the widespread use of index techniques in constructing economic aggregates and because the index number approach is used by statistical agencies in constructing official productivity measures. Attention was given to common index number formulae, whose application were illustrated using simple numerical examples, and approaches to choosing an index number formula. Special attention was also given to measuring physical capital inputs using an integrated framework that links productive capital stocks, economic depreciation, and rental prices; and measuring quality adjusted labour inputs. In regard to the latter, the alternative measure of multifactor productivity that incorporated quality-adjusted labour inputs was shown to be the original multifactor productivity measure adjusted for the composition of the aggregate labour input.
