1997 2.3070 9.0385 2000 2.3164 9.0534 The TFP is also known as Solow residual, named after the American economist Robert Solow. In simpler terms, TFP is calculated by dividing the total production by the weighted average of inputs. The more efficiently you manufacture your products, the more profit you can make. I thought may be it has sense to use cost of goods sold or investments as intermediate input for the proxy option of levpet. 1999 2.3138 9.0327 Without claiming any expert knowledge of the topic, I believe the whole point of the LP methodology is to avoid using investment as a proxy given its limitations. * For searches and help try: * http://www.stata.com/support/statalist/faq By using the Cobb-Douglas function, we get the following numbers: Several factors can directly affect the TFP. * http://www.stata.com/support/faqs/res/findit.html 1994 2.2963 9.0333 rev2023.5.1.43405. Generic Doubly-Linked-Lists C implementation. * http://www.ats.ucla.edu/stat/stata/ * http://www.stata.com/support/statalist/faq 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Introduction The analysis of factor productivity has been a recurrent theme in economics since its early days. When a business has access to the best technology in the market, it can increase the TFP by optimizing all aspects of production. Theory and Practice of Total-Factor Productivity Estimation: The 1983 2.2061 8.5374 1991 2.2875 9.0049 I found one paper using the same data set estimated Ln(Y/L)=4.43 +0.46Log(K/L) But I get very different result. Login or. This calculation can be used to analyze the efficiency of a single employee, groups of employees, or sections of an economy at large. So could you please to suggest me STATA code to estimate CD function and to find TFP and Change in TFP. Many Git commands accept both tag and branch names, so creating this branch may cause unexpected behavior. Thank you in Advance. Theory and practice of total-factor productivity estimation: The control function approach using Stata Login or Register by clicking 'Login or Register' at the top-right of this page.