Language:
English
Pages:
Online-Ressource
Edition:
2010 World Bank eLibrary Also available in print
Series Statement:
NBER working paper series working paper 15579
Parallel Title:
Available in another form Productivity, welfare and reallocation
Abstract:
"We prove that the change in welfare of a representative consumer is summarized by the current and expected future values of the standard Solow productivity residual. The equivalence holds if the representative household maximizes utility while taking prices parametrically. This result justifies TFP as the right summary measure of welfare (even in situations where it does not properly measure technology) and makes it possible to calculate the contributions of disaggregated units (industries or firms) to aggregate welfare using readily available TFP data. Based on this finding, we compute firm and industry contributions to welfare for a set of European OECD countries (Belgium, France, Great Britain, Italy, Spain), using industry-level (EU-KLEMS) and firm-level (Amadeus) data. After adding further assumptions about technology and market structure (firms minimize costs and face common factor prices), we show that welfare change can be decomposed into three components that reflect respectively technical change, aggregate distortions and allocative efficiency. Using the appropriate firm-level data, we assess the importance of each of these components as sources of welfare improvement in the same set of European countries"--National Bureau of Economic Research web site
Note:
Includes bibliographical references
,
Title from PDF file as viewed on 12/29/2009
,
Also available in print.
DOI:
10.1596/1813-9450-5226
URL:
Volltext
(Deutschlandweit zugänglich)
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