DO INDUSTRIAL CLASSIFICATIONS NEED RE-INVENTINg? AN ANALYSIS OF THE RELEVANCE OF THE U.S. SIC SYSTEM FOR PRODUCTIVITY RESEARCH

Two separate empirical investigations into the conceptual structure underlying the U.S. SIC were undertaken. Government industry specialists and industry classification experts reviewed individual4-digit U.S. SICs and judgmentally determined if these industries had been constructed by grouping similar production processes, or, alternatively, by grouping similar markets. Independently, an algorithm derived from the diversification index developed by Gollop and Monahan (1991) was used to measure the heterogeneity of establishment production functions, by 4-digit industry, using the Census Longitudinal Research Database file. The two reviews yielded broadly similar results: Only about one fifth of US. industries have been designed to be approximately consistent with aggregation conditions derived from production theory

A Generalized Index of Diversification: Trends in U.S. Manufacturing.

An index of diversification suitable for manufacturing plants and firms is defined as a function of product number, distribution, and dissimilarity. A novel feature of the index is its continuous treatment of product heterogeneity. Using "Census of Manufactures" data files, the index is constructed for each establishment and each enterprise surveyed in the 1963-1982 censuses. Results are reported at the 2-digit SIC level. While quantifying the upward trend in enterprise diversification, the index reveals an ubiquitous and persistent decline in establishment diversification. Over time, enterprises are shifting toward a more diverse portfolio of increasingly homogeneous plants. Technical economies of scope appear to play little role in explaining the measured increase in enterprise diversification. Copyright 1991 by MIT Press.

The Electric Power Industry: An Econometric Model of Intertemporal Behavior

For US electric utilities realized rates of return were less than allowed rates from 1977-82 and less than the market cost of capital from 1979-82. Also, allowed rates were less than the cost of capital in 1980 and 1981. Estimates of the influence of ...

Productivity and U.S. Economic Growth

Although the level of U.S. per capita output was higher than that of any other industrialized country at the end of World War II, output has increased by more than four times and per capita output has more than doubled. Empirical evidence has shifted the terms of professional debates over the importance of investment and productivity as sources of postwar growth. This volume traces this outstanding growth performance to investments in tangible assets and human capital. The distinctive feature of investment as a source of economic growth is that returns can be internalized by the investor. The most straightforward application of this idea is to investments that create property rights. These include rights to transfer the resulting assets and benefit from the incomes that are generated. This volume broadens the meaning of capital formation to include the investments in education and training. The contributions of these investments to economic growth can be identified from their impacts on labor incomes. After the slowdown in U.S. economic growth that began in 1973 it became apparent that economic research had failed to produce a satisfactory basis for policies to generate growth. This volume provides the starting point for development of a new consensus based on the policies that stimulate and reward investments in tangible assets and human capital. These policies will focus on returns that can be internalized by investors, ending the fruitless search for spill overs that can generate growth without providing incentives for capital formation.https://digitalcommons.usm.maine.edu/facbooks/1152/thumbnail.jp