Volume Title: Output Measurement in the Service Sectors. Volume URL:

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1 This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Output Measurement in the Service Sectors Volume Author/Editor: Zvi Griliches, editor Volume Publisher: University of Chicago Press Volume ISBN: Volume URL: Conference Date: May 4-5, 1990 Publication Date: January 1992 Chapter Title: Front matter, table of contents, prefatory note Chapter Author: Zvi Griliches Chapter URL: Chapter pages in book: (p )

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4 Output Measurement in the Service Sectors

5 Studies in Income and Wealth Volume 56 National Bureau of Economic Research Conference on Research in Income and Wealth

6 Output Measurement in the Service Sectors Edited by Zvi Griliches with the assistance of Ernst R. Berndt, Timothy F. Bresnahan, and Marilyn E. Manser The University of Chicago Press 8$ Chicago and London

7 ZVI GRILICHES is the Paul M. warburg Professor of Economics at Hmard University and director of the Productivity Program at the National Bureau of Economic Research. The University of Chicago Press, Chicago The University of Chicago Press, Ltd., London by the National Bureau of Economic Research All rights reserved. Published 1992 Printed in the United States of America ISBN (cloth): Copyright is not claimed for chap. 1 by Michael F. Mohr, chap. 6 by Dennis J. Fixler and Kimberly D. Zieschang, and Comment on chaps. 6 and 7 by Jack E. Triplett. Library of Congress Cataloging-in-Publication Data Output measurement in the service sectors / Zvi Griliches with the assistance of Ernst R. Berndt, Timothy F. Bresnahan, and Marilyn E. Manser. p. cm.-(studies in income and wealth ; v. 56) Includes bibliographical references and index. 1. Service industries-united States-Labor productivity. I. Griliches, Zvi. 11. Series. HC106.3.C714 vol. 56 [HD9981.5] 330 s-dc20 [ ] paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences-Permanence of Paper for Printed Library Materials, ANSI

8 National Bureau of Economic Research Officers George T. Conklin, Jr., chairman Paul W. McCracken, vice chairman Martin Feldstein, president and chief executive ojicer Geoffrey Carliner, executive director Charles A. Walworth, measurer Sam Parker, director ofjnance and administration Directors at Large John H. Biggs Andrew Brimmer Carl F. Christ George T. Conklin, Jr. Don R. Conlan Kathleen B. Cooper Jean A. Crockett George C. Eads Martin Feldstein George Hatsopoulos Lawrence R. Klein Franklin A. Lindsay Paul W. McCracken Leo Melamed Robert T. Parry Peter G. Peterson Douglas D. Purvis Robert V. Roosa Richard N. Rosett Bert Seidman Eli Shapiro Donald S. Wasserman Directors by University Appointment Jagdish Bhagwati, Columbia William C. Brainard, Yale Glen G. Cain, Wisconsin Franklin Fisher, Massachusetts Institute of Technology Jonathan Hughes, Northwestern Saul H. Hymans, Michigan Marjorie B. McElroy, Duke James L. Pierce, California, Berkeley Andrew Postlewaite, Pennsylvania Nathan Rosenberg, Stanford Harold T. Shapiro, Princeton Craig Swan, Minnesota Michael Yoshino, Harvard Arnold Zellner, Chicago Directors by Appointment of Other Organizations Marcel Boyer, Canadian Economics Association Rueben C. Buse, American Agricultural Economics Association Richard A. Easterlin, Economic History Association Gail Fosler, The Conference Board A. Ronald Gallant, American Statistical Association Robert S. Hamada, American Finance Association Charles Lave, American Economic Association Rudolph A. Oswald, American Federation of Labor and Congress of Industrial Organizations Dean P. Phypers, Committee for Economic Development Charles A. Walworth, American Institute of Certijed Public Accountants Directors Emeriti Moses Abrarnovitz Gottfried Haberler George B. Roberts Emilio G. Collado Geoffrey H. Moore Williard L. Thorp Thomas D. Flynn James J. O Leary William S. Vickrey Since this volume is a record of conference proceedings, it has been exempted from the rules governing critical review of manuscripts by the Board of Directors of the National Bureau (resolution adopted 8 June 1948, as revised 21 November 1949 and 20 April 1968).

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10 Con tents Prefatory Note Introduction Zvi Griliches xi 1 I. WHAT Is BEING DONE 1. Recent and Planned Improvements in the Measurement and Deflation of Services Outputs and Inputs in BEA's Gross Product Originating Estimates 25 Michael F. Mohr Comment: Martin Neil Baily 2. Productivity Measurement in Service Industries 73 Edwin R. Dean and Kent Kunze Comment: W. Erwin Diewert Reply: Edwin R. Dean and Kent Kunze Comment: Robert E. Lipsey 3. Improvements in Measuring Price Changes in Consumer Services: Past, Present, and Future Paul A. Armknecht and Daniel H. Ginsburg Comment: Robert E. Lipsey ALTERNATIVE APPROACHES 4. Productivity in the Distributive "kades: The Shopper and the Economies of Massed Reserves Walter Y. Oi Comment: Sherwin Rosen 161 vii

11 ~ viii Contents 5. The Real Output of the Stock Exchange Timothy F. Bresnahan, Paul Milgrom, and Jonathan Paul IIIA. MEASURING THE OUTPUT OF BANKING AND OTHER SERVICES IIIB. SELECTED INDUSTRIES IV. INTERNATIONAL ASPECTS 6. User Costs, Shadow Prices, and the Real Output of Banks Dennis J. Fixler and Kimberly D. Zieschang Comments (follow chap. 7) 7. Measurement and Efficiency Issues in Commercial Banking Allen N. Berger and David B. Humphrey Comment: Frank C. Wykoff Comment (chaps. 6 and 7): Jack E. Triplett Comment (chaps. 6 and 7): Diana Hancock 8. The Output of the Education Sector Dale W. Jorgenson and Barbara M. Fraumeni Comment: Michael Rothschild 9. Measurement of Output and Quality Adjustment in the Day-care Industry Swati Mukerjee and Ann Dryden Witte 10. Productivity in the Transportation Sector Robert J. Gordon Comment: Robin C. Sickles 11. Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing Donald Siege1 and Zvi Griliches Comment: M. Ishaq Nadiri 12. Dispersion and Heterogeneity of Firm Performances in Nine French Service Industries, Elizabeth Kremp and Jacques Mairesse 13. Measuring Final Product Services for International Comparisons Alan Heston and Robert Summers

12 ix Contents 14. Measuring Public-Sector Output: The Swedish Report Richard Murray Contributors Author Index Subject Index

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14 Prefatory Note Preliminary versions of the papers and discussions contained in this volume were presented at a conference held May 4-5, 1990 in Charleston, South Carolina. Funds for the Conference on Research in Income and Wealth are provided by the Bureau of the Census, the Bureau of Economic Analysis, the Bureau of Labor Statistics, the U.S. Department of Energy, the Statistics Division of the Internal Revenue Service, and Statistics Canada. We are indebted to all of them for their support. Executive Committee, May 1990 Charles Hulten, chair Ernst Berndt Geoffrey Carliner, NBER representative Carol Carson Rosanne Cole Frank de Leeuw Stanley Engerman Zvi Griliches, NBER representative Stanley Lebergott Robert Lipsey Marilyn Manser Robert Parker Sherwin Rosen Fritz Scheuren Charles Waite Volume Editors Acknowledgments The conference from which the volume was developed was organized under the auspices of the Conference on Research in Income and Wealth by a committee consisting of Ernst R. Berndt, Timothy F. Bresnahan, Marilyn E. Manser, and Zvi Griliches, chairman. They also served as the editorial committee xi

15 xii Prefatory Note for this volume. We are grateful to the National Science Foundation and the Sloan Foundation for financial aid in this endeavor. We are indebted to many people who helped make this conference a success and helped in the production of this volume, but especially to Geoffrey Carliner, Jeanette DeHaan, Kirsten Foss, Ilana Hardesty, Charles Hulten, Jane Konkel, and Annie Spillane.