Working Paper: NBER ID: w2634
Authors: Zvi Griliches
Abstract: The paper describes the background for my original "hedonics" paper (Griliches 1961) and discusses some of the issues raised by the subsequent literature on this range of topics. It goes on to consider some of the implications of this work for the measurement of capital services and connects it to the Jorgenson-Griliches (1967) paper on the "explanation of productivity change." It reviews the criticisms made against that paper, especially the use of a utilization adjustment, and fin& itself, perhaps unsurprisingly, still in sympathy with its major thrust. It also cautions against interpreting the recent slowdown in the growth of total factor productivity as implying, necessarily, a parallel slowdown in the technological potential of the economy.
Keywords: Hedonic Price Indexes; Capital Measurement; Productivity Measurement
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Hedonic price indexes (C43) | Accurate estimation of quality changes (C51) |
| Accurate estimation of quality changes (C51) | Measurement of capital services (E22) |
| Accurate estimation of quality changes (C51) | Measurement of productivity (O47) |
| Proper adjustments for quality changes (L15) | Elimination of unexplained residual in productivity growth accounting (O49) |
| Measurement errors and misinterpretations of capital utilization (E22) | Slowdown in total factor productivity (O49) |
| Hedonic price indexes (C43) | Underestimation of capital accumulation (E22) |
| Hedonic price indexes (C43) | Underestimation of productivity growth (O49) |