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Demand conditions, regulation, and the measurement of productivity
(with J. Berechman)
Journal of Econometrics , 1991, 47(2-3), pp.379-400
Abstract: Most econometric studies of productivity use partial equilibrium analysis of cost models to estimate and measure productivity growth. In this paper we provide a market equilibrium model in which supply (cost), demand, and regulatory conditions are explicitly taken into account. The model is used to calculate the rate of growth in cost efficiency (productivity) in the Israeli bus transit sector and to explain this growth by the contributions of input prices, technical change, output scale, demand conditions, and government regulation.
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