|
EconStor >
Forschungsinstitut zur Zukunft der Arbeit (IZA), Bonn >
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/58764
|
| | |
| Title: | | A new approach to testing marginal productivity theory  |
| Authors: | | Biewen, Martin Weiser, Constantin |
| Issue Date: | | 2011 |
| Series/Report no.: | | Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6113 |
| Abstract: | | We address the long standing question of whether production factors are paid their marginal products. We propose a new approach that circumvents the need to specify production functions and to compare marginal products to factor payments. Our approach is based on a simple equation that directly relates firms' profits to discrepancies between factor payments and marginal products. Our empirical application using data on manufacturing firms suggests that capital receives more than its marginal product, intermediate inputs receive less, and labor receives about its marginal product. Although there are differences with respect to firm size, deviations from marginal productivity theory generally seem limited. Our results have important implications for the distribution of income, the presence of optimizing behavior, and the existence of market power. |
| Subjects: | | marginal productivity theory distribution of income robust statistics |
| JEL: | | D33 D22 D40 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-201111303456 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
|
| Files in This Item:
| |
|
| No. of Downloads:
| |
| last Month |
last 3 Month |
total |
|
|
|
|
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/58764
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|