Measuring Productivity: Lessons from Tailored Surveys and Productivity Benchmarking

Journal Article
Published on 1 May 2019

Working paper available through PEDL. Published article available here.

Abstract

Atkin et al. use tailored surveys and benchmarking in the flat-weave rug industry to better understand the shortcomings of standard productivity measures. Quantity-based productivity (TFPQ) performs poorly because of variation in product specifications across firms. Controlling for specifications aligns TFPQ with lab benchmarks. The authors also collect quality metrics to construct quality productivity (the ability to produce quality given inputs) and find substantial dispersion across firms. This motivates interest in multidimensional productivity, or capability. As quality productivity is negatively correlated with TFPQ, revenue-based productivity (TFPR) may perform better at capturing capabilities in settings where better firms make products with more demanding specifications that have greater input requirements.

Authors

David Atkin

Yale University

Amit Khandelwal

Columbia University

Adam Osman

University of Illinois at Urbana Champaign