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Measuring productivity: theory and British practice

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  • Oulton, Nicholas
Abstract
This paper lays out the basic theory behind productivity measurement, whether at the level of the country, region, industry or firm. The theory is illustrated using recent data from UK official publications. Productivity growth over time and differences in productivity levels between countries or regions at a point in time are both covered. Labour productivity and multi-factor productivity (MFP) are discussed. In the case of MFP special attention is paid to the measurement of capital inputs. Wherever possible, an accompanying spreadsheet supplies data from recent publications by the United Kingdom’s Office for National Statistics so that readers can reproduce official estimates or even employ alternative assumptions to produce their own estimates. Limitations in the underlying theory are highlighted as are empirical difficulties in implementing the theory.

Suggested Citation

  • Oulton, Nicholas, 2020. "Measuring productivity: theory and British practice," LSE Research Online Documents on Economics 106474, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:106474
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    File URL: http://eprints.lse.ac.uk/106474/
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    References listed on IDEAS

    as
    1. W. Diewert, 2015. "Decompositions of productivity growth into sectoral effects," Journal of Productivity Analysis, Springer, vol. 43(3), pages 367-387, June.
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    Cited by:

    1. Kamila Radlinska, 2020. "Procyclicality of Changes in Labour Productivity - Labour Hoarding in CEE Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 185-200.
    2. Jon D. Samuels & Mun S. Ho, 2021. "The Contribution of Reallocation to U.S. GDP Growth: Measurement Using Tiered Aggregation," BEA Working Papers 0190, Bureau of Economic Analysis.

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    More about this item

    Keywords

    productivity; measurement; MFP; capital; labour;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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