Manufacturing Dispersion: How Data Cleaning Choices Affect Measured Misallocation and Productivity Growth in the Annual Survey of Manufactures

Hang Kim, Martin Rotemberg and T. Kirk White

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Measurement of dispersion of productivity levels and productivity growth rates across businesses is a key input for answering a variety of important economic questions, such as understanding the allocation of economic inputs across businesses and over time. While item nonresponse is a readily quantifiable issue, we show there is also misreporting by respondents in the Annual Survey of Manufactures (ASM). Aware of these measurement issues, the Census Bureau edits and imputes survey responses before tabulation and dissemination. However, edit and imputation methods that are suitable for publishing aggregate totals may not be suitable for estimating other measures from the microdata. We show that the methods used dramatically affect estimates of productivity dispersion, allocative efficiency, and aggregate productivity growth. Using a Bayesian approach for editing and imputation, we model the joint distributions of all variables needed to estimate these measures, and we quantify the degree of uncertainty in the estimates due to imputations for faulty or missing data.

Date: 2025-09
New Economics Papers: this item is included in nep-eff
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https://www2.census.gov/library/working-papers/2025/adrm/ces/CES-WP-25-67.pdf First version, 2025 (application/pdf)

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