Total factor productivity estimation: A practical review
AbstractThis paper aims to provide empirical researchers with an overview of the methodological issues that arise when estimating total factor productivity at the establishment level, as well as of the existing techniques designed to overcome them. Apart from the well-known simultaneity and selection bias; attention is given to methodological issues that have emerged more recently and that are related to the use of deflated values of inputs and outputs (as opposed to quantities) in estimating productivity at the firm level, as well as to the endogeneity of product choice. Using data on single-product firms active in the Belgian food and beverages sector, I illustrate the biases introduced in traditional TFP estimates and discuss the performance of a number of alternative estimators that have been proposed in the literature.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/284307.
Date of creation: Feb 2012
Date of revision:
Publication status: Published in Journal of Economic Surveys (2012-02) v.26, p.98-128
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Web page: http://www.kuleuven.be
Other versions of this item:
- Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 98-128, 02.
- Van Beveren, Ilke, 2007. "Total Factor Productivity Estimation: A Practical Review," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/242378, Katholieke Universiteit Leuven.
- Van Beveren, Ilke, 2007. "Total factor productivity estimation: a practical review," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/382028, Katholieke Universiteit Leuven.
- Van Beveren, Ilke, 2007. "Total factor productivity estimation: A practical review," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/386550, Katholieke Universiteit Leuven.
- Ilke Van Beveren, 2007. "Total factor productivity estimation: A practical review," LICOS Discussion Papers 18207, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D40 - Microeconomics - - Market Structure and Pricing - - - General
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