Econometric techniques for productivity analysis developed by EI Vice President Kevin Caves and his co-authors in academia have recently been integrated into STATA, a leading statistical software package used globally by economists and empirical analysts in a range of disciplines.
Productivity analysis has a wide range of applications, including the measurement of scale economies in high-fixed-cost industries, quantifying the benefits of investing in new technologies, and various antitrust applications. “Recent advances in econometric tools for productivity measurement allow for more rigorous analysis of these issues, and others as well,” said Dr. Caves. “We’re delighted that STATACorp has taken the lead in propagating our analytical techniques across its global user base.”
As a recent STATA Journal article explains, its new e-class command implements the method of Ackerberg, Caves, and Frazer (2015, Econometrica 83: 2411–2451). The program generates nonlinear, robust generalized method of moments estimates using a Mata function, as well as two specification tests, and reports the resulting firm-level productivity estimates.