Measuring Productivity in the Public Sector: Some Conceptual Problems
AbstractIn 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.
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Bibliographic InfoPaper provided by Vancouver School of Economics in its series Economics working papers with number erwin_diewert-2010-6.
Length: 26 pages
Date of creation: 17 Feb 2010
Date of revision: 13 Jul 2010
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Web page: http://www.economics.ubc.ca/
Measurement of output; input and productivity; nonmarket sector; health; education; general government; cost functions; duality theory; marginal cost;
Other versions of this item:
- W. Diewert, 2011. "Measuring productivity in the public sector: some conceptual problems," Journal of Productivity Analysis, Springer, vol. 36(2), pages 177-191, October.
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
- H40 - Public Economics - - Publicly Provided Goods - - - General
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I20 - Health, Education, and Welfare - - Education - - - General
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