Primary Versus Secondary Production Techniques in U.S. Manufacturing

Joe Mattey and Thijs T Raa

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

Abstract: In this paper we discuss and analyze a classical economic puzzle: whether differences in factor intensities reflect patterns of specialization or the co-existence of alternative techniques to produce output. We use observations on a large cross-section of U.S. manufacturing plants from the Census of Manufactures, including those that make goods primary to other industries, to study differences in production techniques. We find that in most cases material requirements do not depend on whether goods are made as primary products or as secondary products, which suggests that differences in factor intensities usually reflect patterns of specialization. A few cases where secondary production techniques do differ notably are discussed in more detail. However, overall the regression results support the neoclassical assumption that a single, best-practice technique is chosen for making each product.

Keywords: CES; economic; research; micro; data; microdata; chief; economist (search for similar items in EconPapers)
Date: 1994-10
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:94-12

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