Measuring Productivity using the Index Number Approach: An Introduction

This paper provides an introduction to productivity measurement using index number techniques. Attention is given to the construction of productivity series using common index number formulae, the economic and axiomatic approaches to selecting an index number formula, and the use of chaining. Special attention is also given to measuring physical capital inputs and quality adjusted labour inputs. Numerical examples are used throughout the paper to illustrate the analysis.Productivity measurement; index numbers; capital, quality-adjusted labour inputs

Economic growth revisited : identifying a class of growth models for the New Zealand economy : a thesis presented in partial fulfilment of the requirements for the degree of Master of Applied Economics at Massey University

Using data on twenty industries that comprise the market sector of the New Zealand economy, this thesis sets out to indirectly test three classes of economic growth models for the New Zealand economy. This is achieved by investigating the empirical relationships between TFP growth, output and input price growth, and factor intensities; and then comparing these empirical relationships against the predictions of five growth models. On the basis of this comparison some evidence is found to support the hypothesis that the rival human capital class of endogenous growth models is the most appropriate for the New Zealand economy

The Contributions from Firm Entry, Exit and Continuation to Labour Productivity Growth in New Zealand

This paper evaluates the contributions from firm entry, exit and continuation to labour productivity growth in New Zealand over the period 1995 to 2003. Decomposition techniques developed by Griliches and Regev (1995) and by Foster, Haltiwanger and Krizan (1998) are employed. Results suggest significant heterogeneity across both industries and firms. Most entering firms’ initial level of labour productivity is below the industry average but grows rapidly thereafter. Continuing firms generally add to industry labour productivity growth. On average exiting firms experience stagnant or declining labour productivity in the years leading up to their death, and when they eventually die most have below average labour productivity compared to their industry. This pattern persists even at a highly disaggregated industry level and indicates that firm turnover has positively contributed to labour productivity growth in New Zealand.Firm Performance; Entry; Exit; Turnover; Mobility; Labour Productivity; New Zealand

Productivity in New Zealand 1988 to 2002

This paper reports new aggregate and industry productivity series for the New Zealand economy for the period 1988 to 2002. These productivity series are intended for ongoing monitoring of New Zealand’s productivity performance and for use in further analyses investigating the evolution, sources and determinants of New Zealand’s productivity growth. Productivity series are constructed using index number techniques and industry data sourced from Statistics New Zealand. Throughout, comparisons are made with the productivity estimates reported in Diewert and Lawrence’s (1999), Measuring New Zealand’s Productivity. Industry data are also used to construct productivity series that are comparable with the market sector productivity series published by the Australian Bureau of Statistics. The comparison between Australia and New Zealand shows that market sector multifactor productivity has been similar in both countries over the full sample period. Since 1994 average labour productivity growth has been higher in Australia, which reflects the relatively lower rate of physical capital accumulation in New Zealand after 1993. On the other hand, New Zealand’s capital productivity growth has been higher than Australia’s capital productivity growth since 1994, reflecting the relatively higher growth in hours worked in New Zealand.Economic growth; productivity measurement; index numbers; Australia and New Zealand comparison

The impact of monetary policy on New Zealand business cycles and inflation variability

This paper uses the open economy structural VAR model developed in Buckle, Kim, Kirkham, McLellan and Sharma (2002) to evaluate the impact of monetary policy on New Zealand business cycles and inflation variability and the output/ inflation variance trade-off. The model includes a forward- looking Taylor Rule to identify monetary policy and the impact of monetary policy is evaluated by deriving a monetary policy index using a procedure suggested by Dungey and Pagan (2000). Monetary policy has generally been counter-cyclical, thereby reducing business cycles and inflation variability. Exceptions are in 1993 when monetary policy accentuated the business cycle upswing and in 1998 when monetary policy accentuated the recession, although its impact in 1998 was small relative to the impact of adverse climatic conditions. During the initial years of inflation targeting monetary policy tended to simultaneously reduce inflation and output variability. From 1996 to 2001 monetary policy was less effective in reducing inflation and output variability. This latter period included a brief experiment with a Monetary Conditions Index, the Asian crisis and a large adverse domestic climate shock.Monetary policy; inflation targeting, business cycles; open economy; structural VAR models; inflation, interest rates, exchange rates, climate; international linkages

Productivity Measurement: Alternative Approaches and Estimates

This paper provides a review of conceptual and methodological issues in measuring productivity. Attention is given to the concept of productivity and the relationship between productivity and technological change. Different approaches to measuring productivity are surveyed and the results from a number of NZ productivity studies are summarised. The availability of appropriate input and output data is essential for the accurate measurement of productivity and therefore this paper also discusses some important data issues that influence productivity measurement.Productivity; Measurement Issues; New Zealand; Technological Change

Foregrounding co-production: building research relationships in university-community collaborative research

Emerging scholarship on university–community co-production rightly emphasizes the importance of preparatory work to build research partnerships. Such preparation creates the necessary common ground on which to build a meaningful collaborative relationship. Drawing on our experiences on a large university– community co-production experiment in historical mapping, we argue that this work is particularly important in partnerships where relationships are characterized by difference. If academics wish to work with individuals and groups beyond the bounds of those with whom they already agree, ‘foregrounding’ co-production is a critical component. We identify three dimensions of foregrounding coproduction: practical, epistemological and affective. Each become increasingly important in cases where communities lack trust in, or actively mistrust, the university. Understanding and navigating difference, historical harm and power asymmetries can be time-intensive, and it may require a reorientation of the relationship between process and output in collaborative projects such that initially intended aims are not met. In order to encourage co-production across difference, we conclude that foregrounding should be valued as an end or ‘output’ in and of itself

An empirical investigation of fiscal policy in New Zealand

This paper examines the effects of fiscal policy, measured by changes in government spending and net tax (government tax revenue less transfer payments), on New Zealand GDP. The framework of analysis is a structural vector autoregression (VAR) model of the New Zealand economy, employing and extending estimation techniques used by Blanchard and Perotti (2002). This model is then used to examine the dynamic effects of changes in government spending, taxes and transfers on GDP and the contributions of discretionary fiscal policy to New Zealand business cycles.Fiscal policy, business cycle fluctuations, vector autoregression

A structural VAR model of the New Zealand business cycle

This paper develops a new open economy structural VAR model of the New Zealand economy. The model adopts techniques introduced by Cushman and Zha (1997) and Dungey and Pagan (2000) to identify international and domestic shocks and dynamic responses to these shocks in a small open economy. The international variables are block exogenous and the model includes restrictions on contemporaneous and lagged variables. Novel features include the introduction of an expanded set of domestic financial variables not captured in previous New Zealand VAR models, the use of a forward looking Taylor Rule to identify monetary policy, and the introduction of a climate variable to capture the impact of climatic conditions on the business cycle. Key results to emerge are the significant influence of international variables on the New Zealand business cycle, the importance of separately identifying import price and export price shocks, and the significant influence of climate.Open economy; structural VAR models; business cycles; climate; commodity prices; international linkages; financial conditions.

Cost-Effectiveness of Reclassification Sampling for Prevalence Estimation

Background: Typically, a two-phase (double) sampling strategy is employed when classifications are subject to error and there is a gold standard (perfect) classifier available. Two-phase sampling involves classifying the entire sample with an imperfect classifier, and a subset of the sample with the gold-standard. Methodology/Principal Findings: In this paper we consider an alternative strategy termed reclassification sampling, which involves classifying individuals using the imperfect classifier more than one time. Estimates of sensitivity, specificity and prevalence are provided for reclassification sampling, when either one or two binary classifications of each individual using the imperfect classifier are available. Robustness of estimates and design decisions to model assumptions are considered. Software is provided to compute estimates and provide advice on the optimal sampling strategy. Conclusions/Significance: Reclassification sampling is shown to be cost-effective (lower standard error of estimates for the same cost) for estimating prevalence as compared to two-phase sampling in many practical situations