Advertisement

Journal of Productivity Analysis

, Volume 24, Issue 2, pp 133–155 | Cite as

Productivity and Welfare

  • Lilyan E. Fulginiti
  • Richard K. Perrin
Article

Abstract

Technical change is generally characterized by a rate and biases, both evaluated for given producer prices. This paper examines the potential discrepancy between this rate and the corresponding rate of consumer welfare change as measured by Allais distributable surplus. We postulate a general equilibrium context with various market failures (taxes, quotas, imperfect competition, and “poorly priced” commodities), and use comparative statics to express the rate of welfare change in terms of the rate and biases of the technical change. An elementary simulation model of a taxed economy suggests that the rate of welfare change may differ from the rate of technical change by as much as 50% under plausible circumstances.

Key words

productivity Allias surplus general equilibrium 

JEL Classification

D2 D5 D6 O3 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Auerbach, A. J. 1985“The Theory of Excess Burden and Optimal Taxation”Feldstein, M. eds. Handbook of Public EconomicsNorth-HollandNew York and Oxford61127Google Scholar
  2. Allais, M. 1973“La Theorie Generale des Surplus et l’Apport Fondamental de Vilfredo Pareto”Revue d’Economic Politique610441097Google Scholar
  3. Allais, M. 1977“Theories of General Equilibrium and Maximum Efficiency”Schwodiauer, G. eds. Equilibrium and Disequilibrium TheoryD. ReidelHingham, MAGoogle Scholar
  4. Allen, R. D. G. 1949“The Economic Theory of Index Numbers”Economica, NS16197203Google Scholar
  5. Basu, S., Fernald, J. 2001“Why is Productivity Procyclical? Why Do We Care?”Hulten, C. R.Dean, E. R.Harper, M. J. eds. New Developments in Productivity Analysis, tudies in Income and Wealth, Vol. 63, NBERUniversity of Chicago PressChicagoGoogle Scholar
  6. Basu, S., Fernald, J. 2002“Aggregate Productivity and Aggregate Technology”European Economic Review46963991CrossRefGoogle Scholar
  7. Berndt, E. R., Fuss, M. 1986“Productivity Measurement Using Capital Asset Valuation to Adjust for Variations in Utilization”Journal of Econometrics33730CrossRefGoogle Scholar
  8. Binswanger, H. 1974“The Measurement of Technical Change Biases with Many Factors of Production”American Economic Review64964976Google Scholar
  9. Capalbo, S. 1986“Temporary Equilibrium Production Models For a Common-Property Renewable-Resource Sector”Journal of Econometrics33263284CrossRefGoogle Scholar
  10. Christiansen, G. and R. Haveman. (1981). “The Contribution of Environmental Regulations to the Slowdown in Productivity Growth”. Journal of Environmental Economics and Management, 381–390Google Scholar
  11. Conrad, K., Morrison, C. 1989“The Impact of Pollution Abatement Investment on Productivity Change: An Empirical Comparison of the U.S., Germany, and Canada”Southern Economic Journal55684698Google Scholar
  12. Cowing, T. G., Stevenson, R. E. 1981Productivity Measurement in Regulated IndustriesAcademic PressNew YorkGoogle Scholar
  13. Crandall, R. W. 1981“Pollution Controls and Productivity Growth in Basic Industries”Cowing, T. G.Stevenson, R. E. eds. Productivity Measurement in Regulated IndustriesAcademic PressNew YorkGoogle Scholar
  14. Curry, J.M., Murphy, J. A, Schmitz, A. 1971“The Concept of Economic Surplus and its Use in Economic Analysis”Economic Jl81741799Google Scholar
  15. Debreu, G. 1951“The Coefficient of Resource Utilization”Econometrica19273292Google Scholar
  16. Denison, E. 1979Accounting for Slower Economic Growth: The United States in the 1970sThe Brookings InstitationWashington, D.C.Google Scholar
  17. Diewert, W. E. 1976“Exact and Superlative Index Numbers”Journal of Econometrics4115145CrossRefGoogle Scholar
  18. Diewert, W. E. 1980“Capital and the Theory of Productivity Measurement”American Economic Review70260267Google Scholar
  19. Diewert, W. E. 1981“The Measurement of Deadweight Loss Revisited”Econometrica4912251244Google Scholar
  20. Diewert, W. E. 1983“The Measurement of Waste Within the Production Sector of an Open Economy”Scandinavian Journal of Economics85159179Google Scholar
  21. Diewert, W. E. 1990“The Theory of the Cost-of-Living Index and the Measurement of Welfare Change”Diewert, W. E. eds. Price Level MeasurementNorth HollandAmsterdamGoogle Scholar
  22. Diewert, W. E. 1992a“Exact and Superlative Welfare Change Indicators”Eonomic Inquiry30565582Google Scholar
  23. Diewert, W. E. 1992b“Fisher Ideal Output, Input, and Productivity Indexes Revisited”Journal of Productivity Analysis3211248CrossRefGoogle Scholar
  24. Diewert, W. E. 2001“Which (Old) Ideas On Productivity Measurement are Ready to Use?”Hulten, C. R.Dean, E. R.Harper, M. J. eds. New Developments in Productivity Analysis. Studies in Income and Wealth, Vol 63, NBER.University of Chicago PressChicagoGoogle Scholar
  25. Diewert, W. E., Morrison, C. J. 1986“Adjusted Output and Productivity Indexes for Changes in the Terms of Trade”Economic Journal96659679Google Scholar
  26. Diewert, W. E., Nakamura, A. O. 2003“Index Number Concepts, Measures and Decomposition of Productivity Growth”Journal of Productivity Analysis19127159CrossRefGoogle Scholar
  27. Dixit, A., Norman, V. 1979Theory of International TradeCambridge University PressCambridgeGoogle Scholar
  28. Färe, R., Grosskopf, S., Lovell, C. A. K., Pasurka, C. 1989“Multilateral Productivity Comparisons When Some Outputs are Undesirable: A Nonparometric Approach”The Review of Economics and Statistics719098Google Scholar
  29. Griliches, Z. 1957“Hybrid Corn: An Exploration in the Economics of Technological Change”Econometrica25501523Google Scholar
  30. Griliches, Z. 1994“The Discovery of the Residual: A Historical Note”Journal of Economy. Literature3413241330Google Scholar
  31. Hall, R. E. 1990“Invariance Properties of Solow’s Productivity Residual”Peter, Diamond eds. Growth, Productivity, EmploymentMIT PressCambridgeGoogle Scholar
  32. Hicks, J. R. 1942“Consumers’ Surplus and Index Numbers”Review of Economic Studies9126137Google Scholar
  33. Hicks, J.R. 1945–1946“The Generalized Theory of Consumer’s Surplus”Review of Economic Studies136874Google Scholar
  34. Hines, J. R 1999“Three Sides or Harberger Triangles”Journal of Economic Perspectives13167188Google Scholar
  35. Hulten Charles R. (2000). “Total Factor Productivity: A Short Biography”. NBER Working Paper 7471. Cambridge, MA, January 2000.Google Scholar
  36. Jorgenson, D., Griliches, Z. 1967The Explanation of Productivity Change”Rev. Econ. Stud.34249283Google Scholar
  37. Kohli, U. 1991Technology, Duality, and Foreign Trade: The GNP Function Approach to Modeling Imports and ExportsHarvester WheatsheafLondonGoogle Scholar
  38. Konüs, A. A. 1939“The Problem of the True Index of the Cost-of-Living”Econometrica71029Google Scholar
  39. Morrison Paul, C. 1999Cost Structure and the Measurement of Economic PerformanceKluwerMAGoogle Scholar
  40. Morrison Paul, C. 2001Comment on “Why is Productivity Procyclical? Why Do We Care?”Hulten, C. R.Dean, E. R.Harper, M. J. eds. New Developments in Productivity Analysis, Studies in Income and Wealth, Vol. 63, NBER.University of Chicago PressChicagoGoogle Scholar
  41. Norsworthy, J., Harper, M., Kunze, K. 1979“The Slowdown in Productivity Growth: Analysis of Some Contributing Factors”Brookings Papers in Economic Activity2387421Google Scholar
  42. Ohta, M. 1975“A Note on the Duality Between Production and Cost Functions: Rate of Returns to Scale and Rate of Technical Progress”Economic Studies Quarterly256365Google Scholar
  43. Parham, D., P. Barnes, P. Roberts and S. Kennett. (2000). Distribution of the Economic Gains of the 1990s. Productivity Commission Staff Research Paper, Canberra: AusInfo. Website: http://www.pc.gov.au/research/stafres/doteg/doteg.pdfGoogle Scholar
  44. Pittman, R. W. 1983“Multilateral Productivity Comparisons with Undesirable Output”The Economic Journal93883891Google Scholar
  45. Perrin, R., Fulginiti, L. 2001“Technological Change and Welfare in an Open Economy with Distortions”American Journal of Agricultural Economics83455464CrossRefGoogle Scholar
  46. Samuelson, P. 1948Foundations of Economic AnalysisHarvard. U. PressCambridgeGoogle Scholar
  47. Slesnick, D. T. 1998“Empirical Approaches to the Measurerment of Welfare”Journal of Economic Literature3621082165Google Scholar
  48. Solow, R. M. 1957“Technical Change and the Aggregate Production Function”Review of Economics and Statistics39321320Google Scholar
  49. Tinbergen, J. (1942). “Zur Theoie der Langfirstigen Wirtschaftsentwicklung”. Weltwirts. Archiv. 1, 511–549, Amseterdam, North Holland, 1942; reprinted in English translation in Jan Tinbergen: Selected Papers, North Holland, 1959.Google Scholar
  50. Woodland, A.D. 1982International Trade and Resource AllocationNorth-HollandAmsterdamGoogle Scholar

Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  1. 1.University of Nebraska Agricultural Experiment StationLincolnUSA
  2. 2.University of NebraskaUSA

Personalised recommendations