The measurement of total factor productivity change (or difference) vis-à-vis labor productivity change crucially depends on the measurement and decomposition of capital input cost. This paper discusses the basics of its measurement and shows that one can dispense with the usual neoclassical assumptions. By virtue of its structural features, the measurement model is applicable to individual establishments and aggregates such as industries, sectors, or economies. © 2011 The Author. Review of Income and Wealth

total factor productivity
Production; Capital and Total Factor Productivity; Capacity (jel D24)
dx.doi.org/10.1111/j.1475-4991.2010.00435.x, hdl.handle.net/1765/25740
Review of Income and Wealth
Erasmus School of Economics

Balk, B.M. (2011). Measuring and decomposing capital input cost. Review of Income and Wealth, 57(3), 490–512. doi:10.1111/j.1475-4991.2010.00435.x