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Working paper

Measuring Productivity using the Index Number Approach: An Introduction (WP 04/05)

Issue date: 
Tuesday, 1 June 2004
Status: 
Current
View point: 
Publication category: 
JEL classification: 
C43 - Index Numbers and Aggregation; Leading indicators
D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
E23 - Macroeconomics: Production

Formats and related files

This paper provides an introduction to productivity measurement using index number techniques.

Abstract

This paper provides an introduction to productivity measurement using index number techniques. Attention is given to the construction of productivity series using common index number formulae, the economic and axiomatic approaches to selecting an index number formula, and the use of chaining. Special attention is also given to measuring physical capital inputs and quality adjusted labour inputs. Numerical examples are used throughout the paper to illustrate the analysis.

Acknowledgements

I would like to thank Tony Booth, John Creedy, Kevin Fox, David Law, Peter Mawson, John Morris and Grant Scobie for comments on an earlier draft of this paper.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury. The New Zealand Treasury takes no responsibility for any errors or omissions in, or for the correctness of, the information contained in this Working Paper. The paper is presented not as policy, but to inform and stimulate wider debate.

Last updated: 
Monday, 29 October 2007