Measuring Productivity in the Public Sector: Some Conceptual Problems

Walter Diewert

Economics working papers from Vancouver School of Economics

Abstract: In many sectors of the economy, governments either provide various services at no cost or at highly subsidized prices. Examples are the health, education and general government sectors. The paper analyzes three possible general methods to measure the price and quantity of nonmarket government outputs. If quantity information on nonmarket outputs is available, then the first two methods of price valuation rely on either purchaser based valuations or on cost based valuations. If little or no information on the quantity of nonmarket outputs produced is available, then the method recommended in the System of National Accounts 1993 must be used, where aggregate output growth is set equal to aggregate input growth. The paper also discusses various methods of adjusting for quality change.

Keywords: Measurement of output; input and productivity; nonmarket sector; health; education; general government; cost functions; duality theory; marginal cost (search for similar items in EconPapers)
JEL-codes: C43 D24 E23 H40 H51 H52 I12 I20 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2010-02-17, Revised 2010-07-13
New Economics Papers: this item is included in nep-eff
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Related works:
Journal Article: Measuring productivity in the public sector: some conceptual problems (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:erwin_diewert-2010-6

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