A Comparison of Productivity Behavior in Manufacturing and Service Industries
F OLLOWING a pioneering article by Solow [71 the problem of measuring technical change has been investigated by many authors, viz., Hogan [4], Massell [i], Pasinetti [6], Solow [7]. What almost all the papers above attempt to do is to construct a series which indexes or measures technical change. The term is slightly inaccurate in that the series really purport to describe the time profile of that part of output which is not explained by the specified inputs, viz., capital and labor. It may be preferable to employ the term in accounting for such variations in observed output, a terminology which will be adhered to below. We shall provide a simple method of estimating a productivity parameter in a firm or sectoral or global production function. We shall then apply this method in estimating the appropriate parameter for the Manufacturing and Service Sector of the United States post-war economy. Finally, we shall indicate a method for testing a statistical hypothesis on the equality of two parameters so estimated. It will be found that the data does not warrant the conclusion that the rate of change of productivity differs significantly as between the two sectors.
- DOI
- 10.2307/1924142
- Volume
- 45 (1)
- Pages
- 64
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