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• W1511211790 abstract "The measurement of the impact of technical change has received significant attention within the economicsliterature. One popular method of quantifying the impact of technical change is the use of growth accountingindex numbers. However, in a recent article Nelson and Pack (1999) criticise the use of such index numbersin situations where technical change is likely to be biased in favour of one or other inputs. In particular theycriticise the common approach of applying observed cost shares, as proxies for partial output elasticities, toweight the change in quantities which they claim is only valid under Hicks neutrality. Recent advances in themeasurement of product and factor biases of technical change developed by Balcombe et al (2000) provide arelatively straight-forward means of correcting product and factor shares in the face of biased technicalprogress. This paper demonstrates the correction of both revenue and cost shares used in the construction ofa TFP index for UK agriculture over the period 1953 to 2000 using both revenue and cost function shareequations appended with stochastic latent variables to capture the bias effect. Technical progress is shown tobe biased between both individual input and output groups. Output and input quantity aggregates are thenconstructed using both observed and corrected share weights and the resulting TFPs are compared. Theredoes appear to be some significant bias in TFP if the effect of biased technical progress is not taken intoaccount when constructing the weights" @default.
• W1511211790 created "2016-06-24" @default.
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• W1511211790 date "2003-01-01" @default.
• W1511211790 modified "2023-09-26" @default.
• W1511211790 title "A tractable means of correcting sector level TFP calculations in the face of biased technological change." @default.
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