e8820-50

ECON 8820 & 8850:THE ANALYSIS OF PRODUCTIVITY I & II

The objective of this two-course sequence is to develop an understanding of the analytical and empirical techniques required to conduct a sophisticated analysis of the magnitude, and the sources, of productivity change. The subject of the analysis can be as small as a firm (or even smaller; the performance of individual physicians has been studied using these techniques), or as large as a nation. As we study the analytical techniques we shall also examine a wide variety of empirical applications, at various levels of aggregation. We begin with some background reading to introduce basic ideas and to provide some facts. We then review duality theory to develop alternative ways of describing the structure of production technology, and we see how technology and technical change influence productivity change. Next we investigate productive efficiency, and we see how change in productive efficiency influences productivity change. We then turn to a study of the various methodologies that have been used to study productivity change. Each of these methodologies is based, to a greater or lesser extent, on the preceding material. In the second course we continue our study of the techniques and applications of efficiency and productivity change. A core component of the second course is a series of empirical investigations conducted and reported to the class by individual students.

Topic headings and subheadings for the two-course sequence are listed in the table below. The reading list for each of the two courses is available in pdf format. The first course includes Topics 1-7, and the second course includes Topics 8-17.

1. Productivity and Why it Matters
1a. A One-Day Primer on Productivity
1b. Recent Historical Background
1c. The Productivity Paradox
1d. Historical Perspectives on the Productivity Paradox
1e. Measurement Problems

2. Duality and the Role of Production Technology
2a. Theory and Applications
2b. Two useful texts on production theory are

3.The Measurement of Productive Efficiency: Background

4.The Econometric Approach to Efficiency Measurement
4a. Stochastic Frontier Analysis: Techniques
4b. Stochastic Frontier Analysis: Applications
4c. Parametric Shadow Price Analysis
4d. A book-length treatment of SFA is provided by
4e. Two popular software packages are provided by

5. The Mathematical Programming Approach to Efficiency Measurement
5a. Data Envelopment Analysis: Techniques
5b. Weight Restrictions and Value Judgments in DEA
5c. Statistical Foundations of DEA
5d. Data Envelopment Analysis: Applications
5e. Book-length treatments of DEA are provided by
5f. Two popular software packages are
5g. A popular web site with many useful links is

6. Comparing Econometric and Mathematical Programming Analyses

7. Combining Econometric and Mathematical Programming Analyses

8. The Measurement of Productivity Change
8a. Background
8b. The Econometric Approach to Productivity Measurement

9. Malmquist Productivity Indexes
9a. The "Popular" Malmquist Productivity Index
9b The "Other" Malmquist Productivity Index

10. Törnqvist, Fisher and Malmquist Productivity Indexes
10a. Background
10b. Törnqvist and Fisher Indexes
10c. Multilateral Index Numbers
10d. Book-length treatments of productivity indexes are available in
10e. A software package capable of calculating index numbers is

11. Productivity Dispersion and its Determinants

12. Productivity and The Bottom Line
12a. Recent historical background
12b. The Business Literature
12c. Enter the Economists
12d. …and Government Agencies

13. Efficiency, Productivity & the Environment
13a. Background
13b. The Traditional Econometric Approach
13c. The Efficiency-Oriented Approach
13d. The Environmental Kuznets Curve
13e. The Porter Hypothesis
13f. Environmental Accounting

14. Productivity and Regulation
14a. Background
14b. Theoretical Issues
14c. Applications

15. Benchmarking and Standard Setting

16. The Misery Index and Related Macroeconomic Indexes

17. The Pin Factory and How the Consultants Examine Productivity

Go to course reading lists >>> Topics 1-7 or Topics 8-17