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Productivity and Welfare

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  • Lilyan Fulginiti
  • Richard Perrin

Abstract

Technical change is generally characterized by a rate and biases, both evaluated for given producer prices. This paper examines the potential discrepancy between this rate and the corresponding rate of consumer welfare change as measured by Allais distributable surplus. We postulate a general equilibrium context with various market failures (taxes, quotas, imperfect competition, and “poorly priced” commodities), and use comparative statics to express the rate of welfare change in terms of the rate and biases of the technical change. An elementary simulation model of a taxed economy suggests that the rate of welfare change may differ from the rate of technical change by as much as 50% under plausible circumstances. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Lilyan Fulginiti & Richard Perrin, 2005. "Productivity and Welfare," Journal of Productivity Analysis, Springer, vol. 24(2), pages 133-155, October.
    • Handle: RePEc:kap:jproda:v:24:y:2005:i:2:p:133-155
    DOI: 10.1007/s11123-005-4701-5
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    References listed on IDEAS

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    10. Richard K. Perrin & Lilyan E. Fulginiti, 2001. "Technological Change and Welfare in an Open Economy with Distortions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 455-464.
    11. J. R. Norsworthy & Michael J. Harper & Kent Kunze, 1979. "The Slowdown in Productivity Growth: Analysis of Some Contributing factors," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(2), pages 387-422.
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    2. Kibonge Naik, Aziza, 2014. "Agricultural Productivity In Sub-Saharan Africa: Carbon Dioxide Emissions From Land-Use Change," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172350, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    productivity; Allias surplus; general equilibrium; D2; D5; D6; O3;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D6 - Microeconomics - - Welfare Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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