Measuring Factor Income Shares at the Sector Level - A Primer
AbstractMany applications in economics use multi-sector versions of the growth model with Cobb--Douglas production functions at the sector level. In this paper, we measure the U.S. income shares of capital and labour for five sectors that encompass the typical sectors used in the literature. We also split the capital shares of these five sectors into the sector income shares of land and of structures and equipment. We find that the factor income shares differ widely across sectors. For example the capital share in agriculture is about twice that in construction. Moreover, the land shares in agriculture and in services are sizeable whereas the land shares in all other sectors are small. Our findings suggest that the general practice of using the economy-wide factor income shares also at the sector level is not a good practice.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6271.
Date of creation: Apr 2007
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- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- NEP-AGR-2007-05-04 (Agricultural Economics)
- NEP-ALL-2007-05-04 (All new papers)
- NEP-EFF-2007-05-04 (Efficiency & Productivity)
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