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Computers and Productivity: are Aggregation Effects Important?


  • Robert H. McGuckin


This article examines the empirical implications of aggregation bias when measuring the productive impact of computers. To isolate "aggregation in variables" and "aggregation in relations" problems, we compare production function estimates across specifications, econometric estimators, and data levels. The results show both sources of bias are important, especially when moving from sectors to the economy level, and when the elasticity of all types of noncomputer capital are restricted to be equal. The elasticity of computers is surprisingly stable between industry and sector regressions and does not appear biased by incorporating a restrictive measure of non-computer capital. The data consistently show that computers have a large impact on output. Copyright 2002, Oxford University Press.

Suggested Citation

  • Robert H. McGuckin, 2002. "Computers and Productivity: are Aggregation Effects Important?," Economic Inquiry, Western Economic Association International, vol. 40(1), pages 42-59, January.
  • Handle: RePEc:oup:ecinqu:v:40:y:2002:i:1:p:42-59

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    References listed on IDEAS

    1. David Card & Alan B. Krueger, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 151-200.
    2. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
    3. William M. Rodgers III, 1997. "Male Sub-metropolitan Black-White Wage Gaps: New Evidence for the 1980s," Urban Studies, Urban Studies Journal Limited, vol. 34(8), pages 1201-1213, July.
    4. Grogger, Jeff, 1996. "Does School Quality Explain the Recent Black/White Wage Trend?," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 231-253, April.
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    Cited by:

    1. Juan M. Gallego & Luis H. Gutiérrez & Sang H. Lee, 2015. "A firm-level analysis of ICT adoption in an emerging economy: evidence from the Colombian manufacturing industries," Industrial and Corporate Change, Oxford University Press, vol. 24(1), pages 191-221.
    2. Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2477-2502, November.
    3. Francesco VENTURINI, 2008. "Information Technology, Research & Development, or Both? What Really Drives A Nation's Productivity," Working Papers 321, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    4. Liao, Hailin & Wang, Bin & Li, Baibing & Weyman-Jones, Tom, 2016. "ICT as a general-purpose technology: The productivity of ICT in the United States revisited," Information Economics and Policy, Elsevier, vol. 36(C), pages 10-25.
    5. Francesco Venturini, 2009. "The long-run impact of ICT," Empirical Economics, Springer, vol. 37(3), pages 497-515, December.
    6. Stenberg, Peter L., 2014. "The Farm Bill and Rural Economies: Broadband Investment Over the last Decade," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 173277, Agricultural and Applied Economics Association.
    7. Desmet, Klaus & Henderson, J. Vernon, 2015. "The Geography of Development Within Countries," Handbook of Regional and Urban Economics, Elsevier.
    8. Ignacio Hernando & Soledad Núñez, 2002. "The contribution of ICT to economic activity: a growth accounting exercise with Spanish firm-level data," Working Papers 0203, Banco de España;Working Papers Homepage.

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