Misallocation or Mismeasurement?

Mark Bils

No 715, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: Revenue per unit of inputs differs greatly across plants within countries such as the U.S. and India. Such gaps may reflect misallocation, which lowers aggregate productivity. But differences in measured average products need not reflect differences in true marginal products. We propose a way to estimate the gaps in true marginal products in the presence of measurement error in revenue and inputs. Applying our correction to U.S. manufacturing micro data eliminates an otherwise mysterious sharp downward trend in allocative efficiency from 1976–2009. For Indian manufacturing from 1985–2011, meanwhile, we estimate that true marginal products were only one-half as dispersed as measured average products.

Date: 2017
New Economics Papers: this item is included in nep-eff
References: Add references at CitEc
Citations: View citations in EconPapers (50)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2017/paper_715.pdf (application/pdf)

Related works:
Working Paper: Misallocation or Mismeasurement? (2020)
Working Paper: Misallocation or Mismeasurement? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:715

Access Statistics for this paper

More papers in 2017 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().