Productivity Races II: The Issue of Capital Measurement

Douglas W Dwyer

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

Abstract: This paper explores the role of capital measurement in determining the productivity of individual textile plants. In addition to gross book value of capital, we experiment with a perpetual inventory measure of capital and implicit (estimated) deflator associated with the age of the plant. Following the methodology of the earlier paper (Productivity Races I), we find that measures of productivity constructed from different measures of capital are highly correlated. Further, their association with alternative measures of economic performance is approximately the same. Nevertheless, the perpetual inventory measure of capital -- the most desirable measure from a theoretical perspective -- does consistently outperform the other two measures.

Keywords: CES; economic; research; micro; data; microdata; chief; economist (search for similar items in EconPapers)
Date: 1997-01
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:97-3

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