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Measurement and Interpretation of Productivity PANEL TO REVIEW PRODUCTIVITY STATISTICS Committee on National Statistics Assembly of Behavioral and Social Sciences National Research Council NATIONAL ACADEMY OF SCIENCES Washington, D.C. 1979

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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the Councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the Committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. Library of Congress Cataloging in Publication Data National Research Council. Panel to Review Productivity Statistics. Measurement and interpretation of productivity. Bibliography: p. 1. Industrialproductivity Measurement. I. Title. HD56.N38 1979 658.5 79-22715 ISBN 0-309-02898-1 Available from Office of Publications National Academy of Sciences 2101 Constitution Avenue, N.W. Washington, D.C. 20418 Printed in the United States of America

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PANEL TO REVIEW PRODUCTIVITY STATISTICS ALBERT REES (Chairman), Department of Economics, Princeton Univer- sity ROSANNE COLE, Department of Economic Research, IBM Corporation, Armonk, New York EDWARD F. DENISON, Brookings Institution, Washington, D.C. SOLOMON FABRICANT, Nations Bureau of Economic Research, New York JOHN A. FRECHTEING, T=ck Marketing Research, Ford Motor Company, Birmingham, Michigan ROBERT I. GORDON, Department of Economics, Northwestern University PAUL W. HOLLAND, Educational Testing Service, Princeton, New Jersey BENJAMIN F. KING, School of Business Administration, University of Washington G. S. MADDALA, Department of Economics, University of Florida MARC L. NERLOVE, Department of Economics, Northwestern University REGINAED NEWEEL, International Association of Machinists and Aero- space Workers, Washington, D.C. MARKLEY ROBERTS, American Federation of Labor-Congress of Industri- al Organizations, Washington, D.C. RICHARD RUGGLES, Department of Economics, Yale University W. RICHARD SCOW, Department of Sociology, Stanford University Staff DAVE M. O'NElEE, Sta~Director SHARON DE SHA, Staff Officer JOHN W. KENDRICK, Consultant GEORIA A. WISE, Secretary . . . ~1

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COMMITTEE ON NATIONAL STATISTICS CONRAD TAEUBER (Chairman), Center for Population Research, George- town University MORRIS H. DEGROOT (Associate Chairman), Department of Statistics, Carnegie-Mellon University DAVID R. BRILLINGER, Department of Statistics, University of California, Berkeley STEPHEN E. FIENBERG, Department of Applied Statistics, University of Minnesota CLIFFORD G. HILDRETH, Center for Economic Research, University of Minnesota I. STUART HUNTER, School of Engineering and Applied Science, Princeton University NATHAN KEYFITZ, Center for Population Studies, Harvard University HOWARD LEVENE, Department of Mathematical Statistics, Columbia University NANCY R. MANN, Department of Biomathematics, School of Medicine, University of California, Los Angeles PAUL MElER, Department of Statistics, University of Chicago GEOFFREY H. MOORE, National Bureau of Economic Research, New York INGRAM OLKIN, Department of Statistics, Stanford University EDWARD R. TUFTE, Department of Political Science, Yale University 1V