Estimating Griliches' k-shifts

Abstract

Griliches' k-shift, a crucial parameter in the welfare evaluation of technological change, is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function. The analysis permits decomposition of sectoral productivity growth into productivity growth by commodity. The k-shifts estimated for wheat, corn, soybeans, and beef in U.S. agriculture indicate a decrease in the marginal cost of production of corn, soybeans, and wheat during the 1950-1993 years. © The Author (2010). Published by Oxford University Press on behalf of the Agricultural and Applied Economics Association. All rights reserved.