Measurement and Interpretation of Productivity (1979) / Chapter Skim
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Data Adequacy for Productivity Analysis: A Case Study of the Primary Paper Industry
Data Adequacy for Productivity Analysis: A Case Study of the Primary Paper Industry
Pages 391-422
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From page 391... ...
; paper mills, except building paper (sac 2621) ; paperboard mills (sac 2631)
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From page 392... ...
Because the coverage and specialization ratios are very high for the four paper industries taken together, the CIR annual product data move very similarly to the ASM data from year to year. However, the CIR data include a large amount of intermediate products (especially pulp)
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From page 393... ...
For productivity analysis, therefore, where inputs are almost invariably collected on an industry basis, product data such as CIR will serve only as preliminary estimates until industry output data from CM and ASM become available. CM data differ from ASM data in three related ways: (1)
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From page 394... ...
Paperboard mills (sac 2631) is the only one of the four primary paper industries for which this alternative procedure was followed in 1972.
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From page 395... ...
For higher levels of industry aggregation, the sums of the deflated values in the base and given years are used to derive indexes with value of shipments weights. BUREAU OF ECONOMIC ANALYSIS The Bureau of Economic Analysis prepares estimates of constant-dollar output (measured as value of shipments plus miscellaneous receipts)
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From page 396... ...
BES special product class indexes are usually used, but sometimes single 7-digit commodity producer price indexes are used as alternatives, using relative quantity weights derived from the latest available census. Current- and- constant-dollar shipments are aggregated to the 4-digit level.
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From page 397... ...
For this reason, BES and FOB output indexes are adjusted to Census output data benchmarks as they become available. This is not true of the BEA data, partly because revisions of the gross product originating estimates are not coordinated with revisions of the rest of the national accounts.
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From page 398... ...
Second, the interagency task force may choose unit-value price deflators or special price deflators where these appear to be more appropriate than BES price indexes. For the primary paper industries the task force has typically leaned heavily on unit values.
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From page 399... ...
1 967-Forward The value of pulp shipments, wherever made, is taken from ASM for two primary product classes and is deflated by a price index. The latter is base-year weighted, using sES producer price indexes and CM value of shipments weights, for 7-digit primary products.
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From page 400... ...
Employee-Hour Weights The BES output index is used together with labor input data to measure changes in labor productivity. Unit labor requirements are used as weights whenever available in order to eliminate changes in the productivity measure due to changes in the mix of products whose unit values differ but whose unit labor requirements are the same.
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From page 401... ...
. The BUS procedure differs considerably from the method used by the Census Bureau, where 90 percent of pulp shipments are deflated with unit values, and 38 percent of paper, 10 percent of paperboard, and 100 percent of building paper and board shipments are deflated using BUS producer price indexes.
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From page 402... ...
The correction factors derived from the ratio of revised to unrevised indexes are sometimes applied to the monthly series as it is carried forward; this extrapolation is made with the expectation that the correction represents a trend. FRB weights are based on Census Bureau estimates of industry value added, which are calculated in conjunction with the output indexes so as
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From page 403... ...
For the industries we are examining, pulp industry value added has been adjusted to a product basis. This is done because the monthly data for pulp include all pulp wherever made, while the bulk of this pulp production occurs in establishments that are primarily paper and board mills.
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From page 404... ...
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From page 405... ...
MATERIALS INPUT Materials consumed in the primary paper industries include nonenergy materials and fuels and electric energy. It is worth noting that over 40 percent of energy (measured in heat content)
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From page 406... ...
The deflators used by BEA are based on BUS producer price indexes (PP~'S) weighted by input coefficients derived from input-output workftles.9 Alternative deflators can be derived from unit-value relatives, drawn from the Census of Manufactures.
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From page 407... ...
Data on woodpulp consumption are divided on an establishment basis between woodpulp consumed in paper and board mills and all other woodpulp consumed. Data on physical quantities of materials consumed in the quinquennial Censuses of Manufactures are reported on an industry, or establishment, basis.
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From page 408... ...
For inputs, only 35 nonenergy materials and 6 energy materials are listed; other materials consumed are not reported in detail. This disparity in the detail of coverage is heightened because establishments in the primary paper industries typically have more complex inputs than outputs.
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From page 409... ...
Pulpwood Consumption Pulpwood is the single most important materials input category in the primary paper industries, accounting for roughly one third of materials input in 1972. Data on pulpwood consumption are collected by two branches of the Bureau of the Census, the Census of Manufactures (CM)
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From page 411... ...
The ratio of CM pulpwood consumed to CIR pulpwood consumed is 0.964 in 1963, 0.959 in 1967, and 0.965 in 1972. Pulpwood Price Index There is no BES producer price index for pulpwood; BEA therefore uses the BES price index for lumber.
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From page 412... ...
CIR publishes estimates of consumption of woodpulp at paper and board mills, which should be very close to the total for the primary paper industries. This pulp is divided into own pulp (transfers and integrated)
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From page 413... ...
A change in Census classification of pulp mills, to exclude nearly all integrated pulp mills, means that pulp consumption in pulp mills (sac 2611) in 1972 was undoubtedly very minor in that year (probably less than 0.1 percent of all pulp consumption in the primary paper industries)
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From page 414... ...
This error is primarily in the integrated pulp data and therefore need not affect the accuracy of the input measures on an establishment basis. There is a substantial discrepancy in the data for market woodpulp, but the size of the reporting error, if any, cannot be determined with precision because of the missing data for pulp mills and building paper and board mills.
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From page 415... ...
However, the PA appears to be sufficiently reliable for annual series. Conclusions on Primary Data Materials input data from the Census of Manufactures seem to have some errors and omissions.
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From page 416... ...
Real materials consumed is obtained through use of BUS producer price indexes, which are aggregated for each asp group using weights from the most recently available input-output (I-O) table.
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From page 417... ...
BEA includes transportation costs as separate components of materials input, but omits wholesale trade costs. ESTIMATES OF REAL VALUE ADDED We have argued that unit value relatives are superior to producer prices for deflating materials input for the primary paper industries.
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From page 418... ...
Comparison with BED Value Added BEA does not estimate materials input and value added at the level of detail of the primary paper industries. The BEA'S smallest categories are asp 24 and 25.
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From page 419... ...
The results are perverse. Over the periods shown, the BEA estimates of output are invariably better estimates of real value added (accepting our estimates as the standard)
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From page 420... ...
Because of the size of these differences, it would be useful for the ASM to carry additional detail on materials input. In the primary paper industries, materials input could be usefully subdivided into a small number of categories: pulpwood, woodpulp, other fibers, chemicals, fillers, and other.
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From page 421... ...
Measures of real materials inputs would provide the basis for solving this problem, since they would permit productivity analysts either to adjust the output measure (yielding real value added) or to include materials explicitly as an additional input.
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From page 422... ...
(1978) Improving the measurement of producer price change.
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